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2015 (11) TMI 1055 - ITAT CHENNAI

2015 (11) TMI 1055 - ITAT CHENNAI - [2015] 42 ITR (Trib) 64 (ITAT [Chen]) - Treatment of carbon credit receipts - assessee admitted receipts from trading of carbon credits as revenue nature and included the same for computation of deduction under section 80-IA - Held that:- It is a credit given to the assessee under the Kyoto Protocol and because of international understanding. Thus, the assessees who have surplus carbon credits can sell them to other assessees under the Kyoto carbon credits to .....

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m sale of carbon credits has to be considered as capital receipt and accordingly, it is not taxable. Thus, there is no question of considering the same for deduction under section 80-IA of the Act. - Decided in favour of assessee. - I. T. A. No. 2174 /Mds/ 2014(assessment year 2010-11). - Dated:- 19-6-2015 - CHANDRA POOJARI (Accountant Member) and CHALLA NAGENDRA PRASAD (Judicial Member) T. Banusekar, Chartered Accountant, for the appellant. A. V. Sreekanth for the respondent. ORDER The order of .....

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r observed that it is not derived from industrial undertaking and not considered the same for computation of deduction under section 80-IA of the Act. Accordingly, he included that portion of income from the business income of the assessee so as to compute deduction under section 80-IA of the Act. Before the Commissioner of Income-tax (Appeals), the assessee pleaded that if it is not trading receipt, it is to be considered as capital receipt and excluded from the total income of the assessee. On .....

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ipt. 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 the character of transferable right or entitlement only due to world concern. The source of carbon credit is world concern and environment. Due to that the assesse gets a privilege in the nature of transfer of carbon credits. Thus, the amount received for carbon credits has no element of profit or gain and it cannot be subjected to tax in any man .....

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who have surplus carbon credits can sell them to other assessees under the Kyoto carbon credits to have capped emission commitment under the Kyoto Protocol. Transferable carbon credit is not a result or incidence of one's business and it is a credit for reducing emissions. The persons having carbon credits get benefit by selling the same to a person who needs carbon credits to overcome one's negative point carbon credit. The amount received is not received for producing and/or selling an .....

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