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TMI Blog2015 (5) TMI 808X X X X Extracts X X X X X X X X Extracts X X X X ..... ct'). 2. The assessee's grounds reads as follows: "2. The Commissioner (Appeals) erred in confirming the disallowance of the claim of Rs. 13,24,581/- being receipts from the sale of carbon credit, Rs. 7,58,000/- received as TUF interest subsidy and Rs. 10,00,569/- received towards generation loss compensation thus totalling Rs. 30,83,150/- under section 80lA of the Act. 3. The Commissioner (Appeals) erred in upholding the assessing officer's view that receipts by way of sale of carbon credit, interest subsidy received under TUF and generation loss compensation are not derived from the generation of ele ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... bon credit sales is to be considered as Capital receipt and not income liable to tax. i. My Home Power Ltd., Vs Dy CIT (2013) 21 ITR (Trib) 186 (Hyd) ii. Ambika Cotton Mills Ltd., Vs Dy. CIT (2013) 27 ITR (Trib) 44 (Chn) iii. Sri Velayudhasamy Spinning Mills P. Ltd., Vs Dy. CIT (2013) 27 ITR (Trib) 106 (Chn)." 3. Similarly, the Revenue challenges the CIT(A)'s order as under: "2. The learned CIT (Appeals)-II, Coimbatore has erred in allowing Rs. 99,00,722/- as d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ,569/-. The Assessing Officer disallowed this entire deduction in assessment order dated 30.11.2012 holding it not covered by the expression 'derived' used in section 80IA(1). He further quoted section 80IA(5) to observe that assessee's losses pertaining to its eligible business already set off against other businesses in preceding assessment years would have to be notionally carried forward against income, if any, of the eligible business of the succeeding assessment years. This course of action did not leave any positive income due unabsorbed depreciation and business losses. The Assessing Officer rejected assessee's explanation based on the case law Velayudhaswamy Spinning Mills P. Ltd vs ACIT [2012] 340 ITR 477(Mad) and concluded that t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lower appellate proceedings for treating sale of carbon credit receipts as 'capital' receipts instead of 'revenue' receipts already accounted. The Revenue fails to point out any distinction on facts. Thus, we accept the assessee's ground. The Assessing Officer is directed to frame necessary computation. 8. The assessee's second ground claims its 'TUF' receipts of Rs. 7.58 lakhs are also 'capital' receipts. The assessment as well as lower appellate treat the same as 'revenue' receipts not entitled for section 80IA deduction. This amount represents interest subsidy @ 5% separately accounted for as receipt instead of netting the same as against interest paid amount. It emerges from case law [2011] 11 taxmann.com 369 (P&H) CIT vs Shamlal ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... The sole issue involved herein is whether or not the assessee's losses from the eligible business already set off in preceding assessment years have to be again notionally carried forward has already been decided against the Revenue in the Velayudhaswamy's case (supra). It submits that its special leave petition is pending before the hon'ble apex court. This cannot form a justifiable ground to adopt a different view. The Revenue's grounds fail. The Revenue's appeal I.T.A.No.1216/Mds/2014 is dismissed.
12. To sum up, the assessee's appeal I.T.A.No.746/Mds/2014 is allowed and the Revenue's appeal I.T.A.No.1216/Mds/2014 is dismissed.
Order pronounced on Friday, the 21st of November , 2014, at Chennai. X X X X Extracts X X X X X X X X Extracts X X X X
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