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TMI Blog2015 (1) TMI 1287X X X X Extracts X X X X X X X X Extracts X X X X ..... vered, we proceed to dispose off this appeal, after hearing the Departmental Representative. 3. The first issue in the grounds of appeal of the Revenue is that Commissioner of Income Tax (Appeals) ought to have taken into consideration that losses from windmill business for the assessment years 2006-07 & 207-08 have to be set off only against profit from windmill business of the assessment year 2010-11. 4. Departmental Representative places reliance on the order of the Assessing Officer. 5. After hearing the Departmental Representative, we find that this issue has been considered by the Commissioner of Income Tax (Appeals) and following the decision of the jurisdictional High Court in the case of M/s. Velayudhasamy Spinning Mills P.Ltd. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... The AR of the appellant placed his reliance on the ratio held in M/s. Velayuthaswamy Spinning Mills (P) Ltd. Vs. ACIT 340 ITR 477 where the jurisdictional High Court held that depreciation already absorbed out of the income in other sources of income cannot be resurrected and readjusted in arriving at the profits from eligible business and requested for granting the deduction claimed by the appellant. The Assessing Officer considering the windmill income as the only source denied deduction claimed by the appellant u/s.80IA and added the entire amount of Rs. 92,19,129/- which includes carbon credit for Rs. 18,94,196/-. Even though department has filed SLP before Supreme Court in the case of M/s. Velayuthaswamy Spinning Mills (P) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... it is eligible to get the benefit of the carbon credits, due to the fact that there is a special scheme developed by the United National Framework Convention on Climate Change (UNFCCC) having liaison with various countries including India for working out the formula to work out the "unit/carbon credits" to be awarded to the windmill for the purpose of reduction of carbon emission. The windmills will be given awarded units called carbon credit proportionately to the electricity generated by the windmill and this factor clearly shows that the carbon credits income is incidental to the main income, if generation of electricity is not existing (in windmills case) then the question of getting the benefit of "carbon credits" will not arise at all ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssessee preferred appeal before the Commissioner of Income Tax (Appeals) contending that the income from sale of carbon credit is inextricably linked to the windmill and is income derived from the windmill for the purpose of deduction under section 80IA of the Act. In the alternative, it was contended that sale of carbon credits is a capital receipt and it is not taxable placing reliance on the decision of the ITAT., Hyderabad Bench in the case of My Home Power Ltd. Vs. DCIT ( 151 TTJ 616). The Commissioner of Income Tax (Appeals) held that the amount received from sale of carbon credits has no element of profit or gain and it cannot be subjected to tax. He further held that carbon credit is entitlement on accretion of capital and hence inc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... under:- "This appeal is sought to be referred and admitted against the judgment and order of the learned Tribunal, dated November 2, 2012 (My Home Power Ltd. v. Deputy err [2013] 21 ITR (Trib) 186 (Hyd)), on the following substantial questions of law: 1. Whether in the facts and in the circumstances of the case and in law, the Income- tax Appellate Tribunal is correct in holding that the sale of carbon credits is to be considered as capital receipt and not liable for tax under any head of income under Income-tax Act, 1961 ? 2. Whether, in the facts and in the circumstances of the case and in law, the Income-tax Appellate Tribunal is correct in holding that there is no cost of acquisition or cost of production to get entitlement for the c ..... X X X X Extracts X X X X X X X X Extracts X X X X
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