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TMI Blog2018 (1) TMI 838X X X X Extracts X X X X X X X X Extracts X X X X ..... claim for deduction otherwise than by a revised return, and did not impinge on the power of the Appellate Tribunal under section 254 of the Income-tax Act, 1961”. CIT(A) was right in accepting the revised claim regarding non taxable of carbon credits. Accordingly ground no.2 raised by the revenue is also dismissed. - ITA No.1994/Kol/2014 - - - Dated:- 18-8-2017 - Shri N. V. Vasudevan, JM And Shri M. Balaganesh, AM For The Department : Shri Sallong Yaden , Addl. CIT For The Assessee : Shr Rakesh Jain, CA ORDER PER N.V.VASUDEVAN, JM: ITA No.1994/Kol/2014 is an appeal by the Assessee while ITA No.1894/Kol/2014 is an appeal by the revenue. Both these appeals are against the order dated 30.07.2014 of CIT(A)-Central-III, Kolkata, relating to AY 2010-11. ITA No.1994/Kol/2014 (Assessee s appeal) 2. Grounds of appeal raised by the assessee read as follows :- 1. That in the facts and circumstances of the case, the ld. CIT(A) erred in confirming disallowance of ₹ 37,21,056/- under sec 40[a][ia] of the I.T.Act, 1961. 2. That in the facts and circumstances of the case the appellant craves leave to add, alter, modify and/or submit f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... see in this appeal. The ld. Counsel however, submitted that the appellant sends jute goods on consignment and the consignees while remitting the sale proceeds and sending account sales in respect of the consignment sale, deducts various charges from such sale proceeds towards various expenses relating to consignment including commission on sales. It was submitted that in respect of expenses incurred by the consignees which are reimbursed which is also included in the sum of ₹ 37,27,056/- disallowance by the AO u/s 40(a)(ia) of the Act, the assessee is not obliged to deduct tax at source. 7. Another submission made by the ld. Counsel for the assessee was for a remand of the issue to the AO with a direction to the AO to verify if the payees have declared the receipt from the Assessee in their return of income and if they have so declared then the addition u/s.40(a)(ia) of the Act should be deleted by the AO. The above submission was made in the context of the amendments to the provisions of Sec.40(a)(ia) of the Act by the Finance Act, 2012 w.e.f. 1-4-2013, whereby a second proviso was inserted which provided that if the payees have filed their return of income showing the re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 1. The learned DR relied on the order of the CIT(A) and submitted that the benefit of the second proviso should not be allowed to the Assessee as the tax deducted at source has not been paid on or before the due date for filing the return of income u/s.139(1) of the Act. 12. We have heard the submissions of the ld. Counsel for the assessee and are of the view that on both the aspects pleaded by the ld. Counsel for the assessee the assessee did not have an opportunity of taking this plea before the revenue authorities. In the interest of justice we deem it fit and proper to set aside the order of CIT(A) on this issue and remand the issue for fresh consideration on two aspects pleaded by the ld. Counsel for the assessee before us. Accordingly the appeal of the assessee is treated as allowed for statistical purposes. ITA No.1894/Kol/2014 (Revenue s appeal) 13. Grounds of appeal raised by the Revenue read as follows :- ( 1) That, on the facts and circumstances of the case, the Ld. CIT(A) was not justified in treating the carbon credits for an amount of Rs.l,01,58,581/- as capital receipts. ( 2) That, on the facts and circumstances of the case, the Ld. CIT(A) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e world atmosphere and environment reducing carbon, heat and gas emissions. The entitlement earned for carbon credits is a capital receipt and cannot be taxed as a revenue receipt. It is not generated or created due to carrying on business but it is accrued due to 'world concern '. It has been made available assuming character of transferable right or entitlement only due to world concern. The source of carbon credit is world concern and environment. Due to that the assessee gets a privilege in the nature of transfer of carbon credits. Thus, the amount received for carbon credits has no element of profit or gain and it cannot be subjected to tax in any manner under any head of income. 17. In view of the aforesaid judgments we do not find any merit in ground no.1 raised by the revenue. Accordingly ground no.1 raised by the revenue is dismissed. 18. As far as ground no.2 raised by the revenue is concerned the facts are that the assessee in the return of income did not make any claim that receipts on account of carbon credit is not taxable. The facts are that the assessee in the return of income did not make any claim that receipts on account of carbon credit is not ta ..... X X X X Extracts X X X X X X X X Extracts X X X X
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