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| The Tax Publishers2023 TaxPub(DT) 778 (Del-Trib) INCOME TAX ACT, 1961
Section 4
Carbon credit was not an off-shoot of business but an off-shoot of environmental concerns and no asset was generated in the course of business but it was generated due to environmental concerns and, therefore., receipt from the sale of Carbon Emission Reductions (CER) Certificates/Carbon Credits was capital receipt not chargeable to tax.
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Income - Capital or revenue receipt - Receipt from the sale of Carbon Emission Reductions (CER) Certificates/Carbon Credits -
Assessee earned receipt from the sale of Carbon Emission Reductions (CER) Certificates/Carbon Credits. AO taxed the same as business income of assessee. Held: Carbon credit was not an off-shoot of business but an off-shoot of environmental concerns and no asset was generated in the course of business but it was generated due to environmental concerns and, therefore., receipt from the sale of Carbon Emission Reductions (CER) Certificates/Carbon Credits was capital receipt not chargeable to tax.
Followed:My Home Power Ltd. (2014) 365 ITR 82 (AP-HC) : 2014 TaxPub(DT) 2672 (AP-HC).
REFERRED :
FAVOUR : In assessee's favour.
A.Y. : 2008-09
IN THE ITAT DELHI BENCH G : NEW DELHI
N.K.BILLAIYA, A.M. & ANUBHAV SHARMA, J.M.
SRF Limited, v. ACIT,
ITA No.5892/Del/2019,
A.Y. 2008-09
23 January 2023
Assessee by: Pradeep Dinodia, Ravi Kumar, & Harish Dhamija, CA
Revenue by: H.K.Choudhary, CIT- DR
Anubhav Sharma, J.M.
The appeal has been filed by the Assessee against order dated 26-3-2013 in Appeal No. 444/11-12 assessment year 2008-09 passed by Commissioner of Income Tax (appeals)-XII, New Delhi (hereinafter referred to as the First Appellate Authority or in short Ld. F.A.A.) in regard to the appeal before it arising out of assessment order dated 29-12-2011 under section 143(3) of the Income Tax Act, 1961 passed by the JCIT(OSD), Circle 9(1), New Delhi (hereinafter referred to as the assessing officer or AO).
2. The facts in brief are that the assessment of assessee was completed on 29-12-2011 u/s 143(3) of the Act which was challenged by the assessee and the appellate order u/s 250 was passed on 8-7-2016 which was challenged both by the revenue and assessee before this Tribunal and the issue with regard to non-consideration of assessees claim in respect of certified emission reductions was remitted to learned assessing officer and to consider the case of assessee in the light of judgment in M/s. My Home Power Ltd. Vs. DCIT, (2013) 151 TTJ 616 (Hyd) : 2013 TaxPub(DT) 0442 (Hyd-Trib). The learned assessing officer after taking into consideration the submissions of assessee was of view that sale of certified Emission Reduction/Carbon credit constitutes profit and gains of the business and taking into consideration the manufacturing process of assessee held the Carbon credit to be trading receipts. Learned assessing officer also relied the action of Learned Tax Authorities in the case of assessee for assessment year 2006-07. The learned Commissioner (Appeals) in the impugned order had sustained the addition.
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