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2022 (6) TMI 1250 - HC - Income TaxNature of receipts - Treatment to carbon credit receipt - Revenue or capital receipts - proceeds realized by the assessee on sale of certified emission reduction credit, which the assessee had earned on the clean development mechanism in its wind energy operations - HELD THAT:- As decided in S.P. SPINNING MILLS PVT. LTD.[2021 (1) TMI 1081 - MADRAS HIGH COURT] the receipts from sale of carbon credit is a capital receipt and cannot be included in the taxable income Technology Upgradation Fund (TUF) subsidy and compensation receivable on non performance of the energy generation - revenue or capital receipt - HELD THAT:- This substantial question of law is covered in favour of the assessee, by the decision of the Division Bench of the Punjab and Haryana High Court in the case of Commissioner of Income Tax v. Sham Lal Bansal [2011 (1) TMI 409 - PUNJAB AND HARYANA HIGH COURT] the view taken in Sahney Steel & Press Works Ltd.'s case (1997 (9) TMI 3 - SUPREME COURT) could not be applied in the present case, as in said case the subsidy was given for running the business. For determining whether subsidy payment was 'revenue receipt' or 'capital receipt', character of receipt in the hands of the assessee had to be determined with respect to the purpose for which subsidy is given by applying the purpose test, as held in Sahney Steel & Press Works Ltd.'s case (supra) itself and reiterated in later judgment in CIT v. Ponni Sugars & Chemicals Ltd. [2008 (9) TMI 14 - SUPREME COURT] referred to in the impugned order of the Tribunal. Assessee appeal allowed.
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