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TMI Blog2016 (2) TMI 233X X X X Extracts X X X X X X X X Extracts X X X X ..... s wind mill power generation/hosiery goods, etc., and it has claimed the benefit of deduction under Section 80IA of the Income Tax Act for the assessment year in question and for the subsequent years as well. Having exercised its option and its losses have been set off already against other income of the business enterprise, the assessee in this appeal falls within the parameters of Section 80IA of the Income Tax Act. There appears to be no distinction on facts in relation to the decision reported in Velayudhaswamy Spinning Mills case (2010 (3) TMI 860 - Madras High Court). - Decided in favour of the assessee - I .T.A.Nos.747 & 1725/Mds/2014, I .T.A.No.1698/Mds/2014 - - - Dated:- 6-1-2016 - SHRI CHANDRA POOJARI, ACCOUNTANT MEMBER AND SHR ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Commissioner of Income Tax (Appeals) and submits that this issue has been decided against the assessee. Thus, the grounds of appeal 1 to 4 raised by the assessee in both the assessment years are dismissed by confirming the orders of the Commissioner of Income Tax (Appeals) on this issue. 5. The next issue in the grounds of appeal of the assessee for the assessment year 2009-10 is that Commissioner of Income Tax (Appeals) erred in holding that the amount received from sale of CDM as revenue receipt. 6. Counsel further submits that an identical issue has been decided by the Hon ble Andhra Pradesh High Court in the case of CIT Vs. My Home Power Ltd.(365 ITR 82) holding that income earned on sale of carbon credit is capital in nature ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... capital receipt and not liable for tax under any head of income under Income-tax Act, 1961 ? 2. Whether, in the facts and in the circumstances of the case and in law, the Income-tax Appellate Tribunal is correct in holding that there is no cost of acquisition or cost of production to get entitlement for the carbon credits, without appreciating that generation of carbon credits is intricately linked to the machinery and processes employed in the production process by the assessee? Sri J. V. Prasad, learned counsel appearing for the appellant-Revenue, submits that the consideration received on account of sale of carbon credits should be treated to be business income as the sale has been made in connection with the business. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ax (Appeals) erred in holding that assessee is entitled for deduction under section 80IA of the Act. 11. At the time of hearing, counsel for the assessee submits that this issue is covered by the decision of jurisdictional High Court in the case of Sri Velayudhaswamy Spinning Mills P.Ltd. Vs. (340 ITR 477) . He also submits that Commissioner of Income Tax (Appeals) following the said decision of the High Court allowed the claim of deduction of the assessee under section 80IA. 12. Departmental Representative places reliance on the order of the Assessing Officer. 13. Heard both sides. Perused orders of lower authorities and the decision of the jurisdictional High Court in the case of CIT Vs. Sri Velayudhaswamy Spinning Mills P.Ltd. ( ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... same is not defined under the provisions. It is to be noted that 'initial assessment year' employed in sub-s. (5) is different from the words beginning from the year referred to in sub-s. (2). Important factors are to be noted in sub-s. (5) and they are as under: (1) it starts with non obstante clause which means it overrides all the provisions of the Act and other provisions are to be ignored; (2) it is for the purpose of determining the quantum of deduction; (3) for the assessment year immediately succeeding the initial assessment year; (4) it is a deeming provision; (5) fiction created that the eligible business is the only source of income; and (6) during the previous year relevant to the initial assessment year and every sub ..... X X X X Extracts X X X X X X X X Extracts X X X X
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