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TMI Blog2015 (4) TMI 1346X X X X Extracts X X X X X X X X Extracts X X X X ..... ith the appeal in ITA No.389/Chd/2013. ITA No. 389/Chd/2013 : 1. Whether in the facts and the circumstances of the case and in law, the Ld. CIT(A) has erred in allowing appeal of the assessee without appreciating the fact of the case? 2. Whether in the facts and circumstances of the case and in law, the Ld. CIT(A) has erred in deleting the addition of Rs. 2,43,40,143/- which was made by the Assessing Officer by denying the benefit of deduction claimed by the assessee 2,43,40,143/- was not "derived from" the eligible business of the assessee? 3. Whether in the facts and circumstances of the case and in law, the Ld. CIT(A) has erred in treating the receipts from sale of CERs as 'Capital Receipt' whereas assesse has himself treat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e sale of such CER was in the nature of business income which was directly related to the business of the assessee through which assessee has put up a electric generation project which produces lesser amount of green house gases and assessee became entitled to credit of carbon units. The Assessing Officer examined the issue in detail and was of the opinion that generation of such CER has nothing to do with the business of the assessee and it was because of environment protocol, therefore, deduction u/s 80IA was denied of this amount. 4. On appeal, the assessee raised ground that assessee was entitled to deduction u/s 80IA on such sales. In addition an additional ground was also raised through which it was contended that consideration recei ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that this decision has been followed by Chennai Bench in the case of Ambika Cotton Mills Ltd v DCIT 27 ITR (Trib) 44 (Chennai) and Sri Velayudhaswamy Spinning Mills P. Ltd v DCIT 27 ITR (Trib) 106 and Jaipur Bench of the Tribunal in the case of Shree Cement Ltd Vs. Addl CIT 31 ITR (Trib) 513. 7. We have considered the rival submissions carefully. The facts of the case are identical to the facts of the case decided by Hyderabad Bench of the Tribunal in the case of My Home Power Ltd Vs. DCIT (supra). In that case it was held as under:- "Held, that carbon credit was in the nature of "an entitlement" received to improve world atmosphere and environment reducing carbon, heat and gas emissions. It was not an offshoot of business but an offshoo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ning Mills P. Ltd v DCIT (supra). Even Jaipur Beach has followed this decision in the case of Shree Cement Ltd Vs. Addl CIT (supra). No doubt the DR has been able to point out the contrary decision rendered by Cochin Bench of the Tribunal in the case of Apollo Tyres Ltd v ACIT (supra). Since the decision of Hyderabad Tribunal Bench has already been confirmed by the Hon'ble Andhra Pradesh High Court and there is no contrary decision from any other High Court, in our opinion, we are bound to follow the decision of High Court. Therefore, following this decision we decide this issue against the Revenue. 10. Ground No.4 : After hearing both the parties we find that during assessment proceedings the Assessing Officer noticed that assessee ha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... urance receipts and if the same was in the Revenue field, then deduction u/s 80IA should be allowed otherwise the issue may be decided in accordance with law. 15. In the result appeal of the Revenue is partly allowed. 16. ITA No. 390/Chd/2013: In this appeal three issues have been raised by the Revenue namely:- (a) Treatment of sale of CER unit is capital receipt. (b) Allowance of deduction u/s 80IA in respect of insurance receipt. (c) Allowance of deduction u/s 80IA in respect of interest subsidy. 17. The first issue is identical to the issue raised in ground Nos. 1 to 3 in ITA No 389/Chd/2013 in the case of DCIT Vs. M/s Kotla Hydro Power Private Ltd which we have adjudicated above and decided the issue in para 7 & 8. Therefore, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he assessee because of particular incentive scheme. This would lead to consequence of reduction of interest which would lead to increase in normal profit, therefore, assessee has been rightly held to be entitled to deduction u/s 80IA by the first appellate authority. 23. After considering the rival submissions we find force in the submissions of the Ld. Counsel for the assessee. The effect of the interest subsidy would be that normal interest expenditure would get reduced because of this subsidy. This in turn would lead to increase in normal profits which would entitle to deduction u/s 80IA, therefore, in our opinion, the Ld. CIT(A) has correctly decided this issue and we confirm his order. Thus the appeal is partly allowed for statistical ..... X X X X Extracts X X X X X X X X Extracts X X X X
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