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TMI Blog2016 (8) TMI 1523X X X X Extracts X X X X X X X X Extracts X X X X ..... ajasthan High Court in CIT vs. Mewar Oil General Mills Ltd. [ 2003 (10) TMI 12 - RAJASTHAN HIGH COURT ], a Hon ble Division Bench of this Court in Velayudhaswamy Spinning Mills Pvt. Ltd. s case [ 2010 (3) TMI 860 - MADRAS HIGH COURT ] held that once the losses and other deductions are set off against the income of the assessee in the previous year, it should not be re-opened again, for the purpose of computation of current year income, under Sections 80-I and 80-IA of the Act. Questions of law raised are answered against the Revenue and in favour of the assessee and the instant appeal deserves to be dismissed. X X X X Extracts X X X X X X X X Extracts X X X X ..... circumstances of the case, while adverting to the substantial questions of law raised and after considering the judgment of the Hon'ble Apex Court in Liberty India vs. CIT reported in (2009) 225 CTR (SC) 233 : (2009) 28 DTR (SC) 73 : (2009) 317 ITR 218 (SC) and the judgment of the Rajasthan High Court in CIT vs. Mewar Oil & General Mills Ltd. reported in (2004) 186 CTR (Raj) 141 : (2004) 271 ITR 311 (Raj), a Hon'ble Division Bench of this Court in Velayudhaswamy Spinning Mills Pvt. Ltd.'s case (stated supra), held that once the losses and other deductions are set off against the income of the assessee in the previous year, it should not be re-opened again, for the purpose of computation of current year income, under Sections 80- ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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. It is not liable for tax for the assessment year under consideration in terms of Sections 2(24), 28, 45 and 56 of the Income Tax Act, 1961. Carbon credits are made available to the assessee on account of saving of energy consumption and not because of its business. Further, in our opinion, carbon credits cannot be considered as a bi-product. It is a credit given to the assessee under the Kyoto Protocol and because of international understanding. Thus, the assessees who have surplus carbon cre ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... v. DCIT in ITA No.631/Mds/2013 for AY 2009-10. 11. Sri Shanmugavel Mills (P) Ltd. v. DCIT in ITA No.619/Mds/2013 for AY 2009-10. 12. Arun Textiles Pvt. Ltd. v. ACIT in ITA No.268/Mds/2014 for AY 2009-10. 13. India Dyeing Mills Pvt. Ltd. v. ACIT in ITA No.498/Mds/2014 for AY 2009-10. 14. DCIT v. Sree Rayalaseema Green Energy Ltd (2014) [36 ITR (Trib) 627] (Hyd) 15. Eastman Spinning Mills (P) Ltd v. DCIT in ITA No.1428/Mds/2014 for AY 2009-10. 5. In view of the above, we are inclined to hold that the receipt from sale of carbon credits has to be considered as capital receipt and accordingly, it is not taxable. Thus, there is no question of considering the same for deduction u/s. 80IA of the Act." 7. Going through the materi ..... X X X X Extracts X X X X X X X X Extracts X X X X
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