The Tax Publishers2019 TaxPub(DT) 8108 (Jp-Trib) : (2019) 178 ITD 0693

INCOME TAX ACT, 1961

Section 4

There is an amendment by Finance Act, 2017 whereby section 115BBG has been inserted and income by way of transfer of carbon credit has been given a special treatment as chargeable to tax @ 10% and not as part of normal business income of assessee. The said amendment is prospective in nature and, therefore, could not be applied during assessment years under consideration as held by CIT(A).

Income - Capital or revenue receipt - Income from sale of Carbon Emission Reduction Certificates (CERs) -

Assessee company was engaged in generation of electricity through hydro electric power plant. AO while passing reassessment order under section 143(3) read with section 147 disallowed claim of deduction under section 80-IA in respect of income from sale of Carbon Emission Reduction Certificates (CERs) and taxed the same. CIT(A) deleted disallowance holding that amount received on sale of (CERs) was capital in nature which was not the claim of assessee. Revenue challenged this.Held: There is an amendment by Finance Act, 2017, whereby section 115BBG has been inserted and income by way of transfer of carbon credit has been given a special treatment as chargeable to tax @ 10% and not as part of normal business income of assessee. The said amendment is prospective in nature and, therefore, could not be applied during assessment years under consideration as held by CIT(A).

REFERRED : Vodafone International Holdings BV. v. UOI & Anr. (2012) 341 ITR 0001 (SC) : 2012 TaxPub(DT) 0370 (SC); CIT v. Maheshwari Devi Jute Mills Ltd. (1965) 57 ITR 36 (SC) : 1965 TaxPub(DT) 0312 (SC); Principal CIT v. Rajasthan State Mines & Minerals Ltd. [D.B. Income Tax Appeal No. 151/2016, dt. 13-10-2017]; Principal CIT v. Raj State Mines and Mineral Ltd. [D.B. Income Tax Appeal No. 147 / 2015, dt. 12-10-2017]; CIT v. Shree Cement Ltd., Beawar ITA No. 85/2014 : 2018 TaxPub(DT) 4688 (Raj-HC); CIT v. Shree Cement Ltd. [D.B. Income Tax Appeal No. 85 / 2014, dt. 22-8-2017]; CIT v. My Home Power Ltd. (2014) 365 ITR 82 (AP) : 2014 TaxPub(DT) 2672 (AP-HC); Sri Velayudhaswamy Spinning Mills (P) Ltd. v. Dy. CIT (2013) 027 ITR (Trib) 0106 (Chen) : 2013 TaxPub(DT) 2704 (Chen-Trib); My Home Power Ltd. v. Dy. CIT ITA No. 1114/Hyd/2009 : 2013 TaxPub(DT) 0442 (Hyd-Trib)

FAVOUR : In assessee's favour.

A.Y. : 2010-11 & 2011-12

IN THE ITAT, JAIPUR BENCH

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