TMI Blog2016 (8) TMI 1574X X X X Extracts X X X X X X X X Extracts X X X X ..... hown as capital receipt. Assessing Officer treated said receipt as business income and brought it to tax. CIT(A) following the decision in case of My Home Power Ltd. [ 2012 (11) TMI 288 - ITAT HYDERABAD] held that the receipt on sale of carbon credits was a capital receipt and deleted the addition. On appeal, Tribunal observed that assessee was engaged in the business of power generation through biomass power generation unit. It received Carbon Emission Reduction Certificates (CERs) popularly known as Carbon Credits for activity of using agricultural waste as fuel. Assessee received certain amount from transfer of carbon credit which was shown as capital receipt. AO treated said receipt as business income and brought it to tax. Whe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... no ambiguity in the Section, there is no warrant for resort to external aids of interpretation namely the notes on clauses and the memorandum explaining its provisions. In the light of decision of VTM Ltd.(supra) with regard to claim of additional depreciation u/s.32(1)(iia) for setting up a windmill, wherein material being sole decision by Hon ble High Court on the matter, we hold that additional depreciation should be allowed. - ITA No. 4899/Mum/2014 - - - Dated:- 26-8-2016 - Shri Shailendra Kumar Yadav, Judicial Member And Shri Rajesh Kumar, Accountant Member For the Appellant : Shri K. Shivaram, A.R. For the Respondent : A. Ramachandran, D.R. ORDER PER SHAILENDRA KUMAR YADAV, J.M : This appeal has been fi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... see engaged in the activity of generation of electricity would be entitled to additional depreciation u/s 32(1)(iia). 2. Assessee is engaged in trading in cotton bales and generation of power. He claimed deduction on income of generation of power from two wind mills which included sale of carbon credits valuing to Rs.10,88,689/-. Assessing Officer disallowed the same inter alia stating that there should be direct nexus between activity of assessee and income generated for it. CIT(A) held that income arising from sale of carbon credits cannot be said to be derived from income of eligible business of company. According to assessee, the generation of carbon credits is a direct result of the wind power energy production. Only the generation ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t from transfer of carbon credit which was shown as capital receipt. Assessing Officer treated said receipt as business income and brought it to tax. CIT(A) following the decision in case of My Home Power Ltd. vs. Dy.CIT [2013] 63 SOT 227/[2012] 27 taxmann.com 27 (Hyd.) held that the receipt on sale of carbon credits was a capital receipt and deleted the addition. On appeal, Tribunal observed that assessee was engaged in the business of power generation through biomass power generation unit. It received Carbon Emission Reduction Certificates (CERs) popularly known as Carbon Credits for activity of using agricultural waste as fuel. Assessee received certain amount from transfer of carbon credit which was shown as capital receipt. Assessing ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... orized Representative submitted that ITAT, Delhi Bench in case of N.T.P.C. vs. DCIT [2012] 54 SOT 177 (URO) (Delhi) (Trib.), considered this decision while dealing with the activity of generation of electricity with respect of additional depreciation u/s.32(1)(iia) and ruled in favour of assessee. Hon ble Madras High Court in case of CIT vs. VTM Ltd. [2009] 319 ITR 336 (Mad.) (HC) examined the same issue and dismissed the revenue appeal seeking to disallow additional depreciation u/s.32(1)(iia) of the Act with respect of setting up a windmill by a manufacturer of textile goods. Thus, following the ratio of VMT Ltd.(supra) issue has been decided in favour of assessee with regard to addition depreciation u/s.32(1)(iia) of the Act. Hon ble Sup ..... X X X X Extracts X X X X X X X X Extracts X X X X
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