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TMI Blog2022 (7) TMI 731X X X X Extracts X X X X X X X X Extracts X X X X ..... of REC (carbon credits) income received by the assessee is a capital receipt and could not be a business receipt or income nor it is directly linked with the business of the assessee nor any asset is generated in the course of business but it is generated due to environmental concern. Therefore, addition made by Ld. TPO/AO on account of sale of RECs/carbon credits during the year under assessment is not sustainable in the eyes of law, hence, ordered to be deleted. - Decided in favour of assessee. - ITA No. 562/M/2022 - - - Dated:- 5-7-2022 - SHRI BASKARAN BR , ACCOUNTANT MEMBER AND SHRI KULDIP SINGH , JUDICIAL MEMBER Assessee by : Shri Jayesh Dadia , A. R. Revenue by : Shri Sambit Mishra , D. R. ORDER Per : Kuldip ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ainst the Appellant just to keep the issue alive as the Revenue has no right of appeal to the Hon'ble Tribunal, under section 253 of the Act. 2. After treating above sum of Rs. 8,90,53,500/- in respect of sale of Renewable Energy Certificates (RECs) as revenue receipt, the Learned Assessing Officer erred in law and on facts in not allowing a sum of Rs. 1,17,40,018/- being expenses wholly and exclusively incurred by the Appellant to earn REC receipts as a deduction. 3. The Learned Assessing Officer erred in law and on facts in levying interest under section 234 B and 234D of the Act. 4. The Learned Assessing Officer erred in law and on facts in initiating penalty proceedings under section 270A of the Act for the a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ly allowed the same. 4. Pursuant to the order passed by the Ld. TPO/Ld. DRP, Assessing Officer (AO) made addition of Rs. Rs.39,84,42,988/- on account of arms length price of the specified domestic transaction. The AO also made addition of Rs.8,90,53,500/- (carbon credits) by disallowing the claim of the assessee qua sale of Renewable Energy Certificates (REC) of Rs.8,90,53,500/- as capital receipt which was not offered to tax by the assessee and thereby framed the assessment at nil income by allowing the balance brought forward unabsorbed depreciation of Rs.21,45,52,898/- under section 143(3) read with section 144C (13) read with section 144B of the Income Tax Act, 1961 (for short the Act ). 5. Feeling aggrieved with the impugned ord ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and taken a decision to challenge the order of the ITAT in Bombay High Court. Considering that Revenue has no right to file appeal against the order of DRP, to keep the issue alive, the panel refrains from granting relief to the assessee. 10. We have perused the order passed by co-ordinate Bench of the Tribunal in assessee s own case in ITA No.312/M/2019 for A.Y. 2015-16 order dated 24.05.2021 which is on identical issue and decided the same in favour of the assessee by following the decision rendered by Hon ble Andhra Pradesh High Court in case of CIT vs. My Home Power Ltd. (2014) 365 ITR 082 (AP) by returning following findings: 7. Considered the submissions of the learned Counsel for both the parties and perused the material ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... oncerns . ITAT agree with this factual analysis as the Assessee is carrying on the business of power generation. The Carbon Credit is not even directly linked with power generation. On the sale of excess Carbon Credits the income was received and hence as correctly held by the Tribunal it is capital receipt and it cannot be business receipt or income. In the circumstances, we do not find any element of law in this appeal. 8. Since the issue in hand is mutatis mutandis covered by the aforesaid decision of the Hon ble A.P. High Court as well as other decisions referred to above, respectfully following the same, we uphold the order of the learned Commissioner (Appeals) by dismissing the ground raised by the Revenue. 11. When th ..... X X X X Extracts X X X X X X X X Extracts X X X X
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