TMI Blog2016 (1) TMI 716X X X X Extracts X X X X X X X X Extracts X X X X ..... the insurance claimed by the assessee has direct nexus with the business income of the assessee and the assessee was not able to show that the receipts received is in relation to current assets or in relation to trading assets of the assessee. Being so, placing reliance by the assessee’s counsel in the case of CIT vs. Meghalaya Steels Ltd. (2013 (7) TMI 175 - GAUHATI HIGH COURT) has no bearing as it is relating to receipt of interest subsidy and also the decision of the Tribunal, Hyderabad Bench in the case of M/s. Coromandel International Ltd. [2014 (12) TMI 220 - ITAT HYDERABAD ] is relating to granting of deduction u/s.80IB of the Act, in respect of excise duty refund. Accordingly, this ground of appeal by the assessee is dismissed. - D ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o 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-tax Act, 1961. Carbon credits are made available to the assessee on account of saving of energy consumption and not because of its business. Further, in our opinion, carbon credits cannot be considered as a bi-product. 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ha Spinning Mills (P) Ltd. v. DCIT in ITA No.630/Mds/2013 for AY 2009-10 10.Adisankara Spinning Mills (P) Ltd. v. DCIT in ITA No. 631/Mds/2013 for AY 2009-10 11.Sri Shanmugavel Mills (P) Ltd. v. DCIT in ITA No. 619/Mds/2013 for AY 2009-10 12.Arun Textiles Pvt. Ltd. v. ACIT in ITA No.268/Mds/2014/ for AY 2009-10 13.India Dyeing Mills Pvt. Ltd. v. ACIT in ITA No.498/Mds/2014 for AY 2009-10 14.DCIT v. Sree Rayalaseema Green Energy Ltd. (2014) [36 ITR (Trib) 627] (Hyd) 15. Eastman Spinning Mills (P) Ltd. v. DCIT in ITA No. 1428/Mds/2014 for AY 2009-10 5. In view of the above, we are inclined to hold that the receipt from sale of carbon credits has to be considered as capital receipt and accordingly, it ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , the submission of the assessee is that payment of excise duty/customs duty on inputs consumed in manufacture of goods by an industrial undertaking eligible for deduction under section 80-1B was inextricably linked to the manufacturing operations of the eligible undertaking without which manufacturing operations cannot be undertaken, hence, the duty, which was paid in the first instance and which had direct nexus to the manufacturing activity when received back, had first degree nexus with the industrial activity of the eligible undertaking and consequently the reimbursement of the said amount cannot be treated as income of the assessee de hors the expense originally incurred by way of payment of duty. Consequently, according to the assess ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... assessee and the assessee was not able to show that the receipts received is in relation to current assets or in relation to trading assets of the assessee. Being so, placing reliance by the assessee s counsel in the case of CIT vs. Meghalaya Steels Ltd. (356 ITR 235) has no bearing as it is relating to receipt of interest subsidy and also the decision of the Tribunal, Hyderabad Bench in the case of M/s. Coromandel International Ltd. in ITA No.1147 1157/Hyd/2014 dated 21.11.2014 is relating to granting of deduction u/s.80IB of the Act, in respect of excise duty refund. Accordingly, this ground of appeal by the assessee is dismissed. 9. In the result, the appeal of the assessee is partly allowed. Order pronounced on Friday, the 6th ..... X X X X Extracts X X X X X X X X Extracts X X X X
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