TMI Blog2015 (12) TMI 820X X X X Extracts X X X X X X X X Extracts X X X X ..... cial Member) The appeal has been filed by the assessee against the order of the Commissioner of Income Tax (Appeals)-II, Coimbatore, dated 30.01.2013 relevant to the assessment year 2009-10. The only issue in appeal is: Whether the amount of ₹ 1,69,31,158/- 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 claimed CDM receipts as capital receipts. The Assessing Officer in scrutiny assessment held CDM receipts to be revenue receipts under the head Income from business profession . The a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed 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 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 assessee 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 manner under any head of income. It is not liable for tax for the assessment year under consideration in terms of sections 2(24), 28, 45 and 56 of the Income-ta ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rt 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 the assessee transferred the carbon credits like loom hours to some other concerns for certain consideration. Therefore, the receipt of such consideration cannot be considered as business income and it is a capital receipt. Accordingly, we are of the opinion that the consideration received on account of carbon credits cannot be considered as income as taxable in the assessment year under consideration. Carbon credit is not an offshoot of business but an offshoot of environmental concerns. No asset is gene ..... X X X X Extracts X X X X X X X X Extracts X X X X
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