TMI Blog2014 (8) TMI 947X X X X Extracts X X X X X X X X Extracts X X X X ..... ANAN AND SHRI VIKAS AWASTHY, JJ. For the Appellant : Shri N. Vijay Kumar, CA For the Respondent : Shri Guru Bhashyam, JCIT ORDER Vikas Awasthy (Judicial Member).- The appeal has been filed by the assessee against the order of the Commissioner of Income-tax (Appeals)-II, Coimbatore, dated January 30, 2013 relevant to the assessment year 2009-10. The only issue in appeal is : whether the amount of ₹ 2,44,93,551 received by the assessee on account of clean development mechanism (CDM) is capital or revenue receipt. 2. The assessee is in the business of manufacture of yarn and electricity generation through wind electrical generators. The assessee in its return of income for the assessment year 2009-10 claime ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nch of the Tribunal in the case of My Home Power Ltd. v. Dy. CIT [2013] 21 ITR (Trib) 186 (Hyd) has held carbon credit as capital receipts. The relevant extract of the findings of the co-ordinate Bench are as under (page 202) : 24. We have heard both the parties and perused the material on record. Carbon credit is in the nature of 'an entitlement' received to improve world atmosphere and environment reducing carbon, heat and gas emissions. The entitlement earned for carbon credits can, at best, be regarded as a capital receipt and cannot be taxed as a revenue receipt. It is not generated or created due to carrying on business but it is accrued due to 'world concern'. It has been made available assuming charact ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f these credits is capital receipt. For this proposition, we place reliance on the judgment of the Supreme Court in the case of CIT v. Maheshwari Devi Jute Mills Ltd. [1965] 57 ITR 36 (SC) wherein it is held that transfer of surplus loom hours to other mill out of those allotted to the assessee under an agreement for control of production was capital receipt and not income. Being so, the consideration received by the assessee is similar to consideration received by transferring of loom hours. The Supreme Court considered this fact and observed that taxability of payment received for sale of loom hours by the assessee is on account of exploitation of capital asset and it is capital receipt and not an income. Similarly, in the present case th ..... X X X X Extracts X X X X X X X X Extracts X X X X
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