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TMI Blog2017 (11) TMI 1967X X X X Extracts X X X X X X X X Extracts X X X X ..... aw:- "(i) Whether the Tribunal was justified in reversing the order of Assessing Officer and by holding the income from sale of Carbon Emission Reduction Certificates (CERs) of Rs. 3,50,00,162/- as capital income, ignoring that the same was specifically a revenue report and even the assessee has claim benefit u/s 80IA of the Act?" However, counsel for the appellant contended that the issue is now squarely covered by the decision of this Court in Tax Appeal No. 151/2016 decided on 13th October, 2017 wherein it has been held as under:- "4. For issue no.4 counsel for the respondent has relied on the decision of this court in ITA No.85/2014 wherein it has been held as under:- "28. The issue No.3 is with regard to sale proceeds received by ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Tax Act does not do so, our view gets duly fortified by the principles stated in the above decision of Supreme Court. Accordingly, this ground of the assessee is allowed and the addition made by the AO is deleted." "5.4 He contended that in view of the decision of the Supreme Court in Poonam Chand Trilok Chand vs. Commissioner of Income Tax (06.01.1982 - ALLHC), 136 ITR 0537 holding as under: 8. Now, coming to the merits of the claim, we find that the view taken by the AAC was absolutely correct while the one taken by the Appellate Tribunal is erroneous in law. As noted above, the assessee follows the mercantile system of accounting. It may be that the assessee was disputing its liability to pay the purchase tax to the State Govt. and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ct to sales tax, the obligation to pay the tax arose. Although that liability could not be enforced till quantification was effected in assessment proceedings, the liability for payment of tax was independent of the assessment. The assessee, which folio wed the mercantile system of accounting, was entitled to a deduction, from the profits and gains of its business, of the liability to pay the sales tax which arose on the sales made by it during the relevant previous year. It was further held that the fact that the assessee was contesting its liability to pay the sales tax or that it failed to debit the liability in its books of account did not debar it from claiming the same as a deduction either under Section 10(1) or under Section 10(2) ( ..... X X X X Extracts X X X X X X X X Extracts X X X X
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