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TMI Blog2015 (4) TMI 1346X X X X Extracts X X X X X X X X Extracts X X X X ..... n or cost of production to get this entitlement. Carbon credit was not in the nature of profit or in the nature of income. The amount realized on transfer of carbon credit was not taxable. This decision has been followed by Chennai Bench in two cases of Ambika Cotton Mills Ltd [ 2014 (3) TMI 428 - ITAT CHENNAI] and Sri Velayudhaswamy Spinning Mills P. Ltd [ 2015 (4) TMI 132 - ITAT CHENNAI] . Even Jaipur Beach has followed this decision in the case of Shree Cement Ltd [ 2015 (3) TMI 759 - ITAT JAIPUR] No doubt the DR has been able to point out the contrary decision rendered by Cochin Bench of the Tribunal in the case of Apollo Tyres Ltd [ 2015 (3) TMI 760 - ITAT COCHIN] . Since the decision of Hyderabad Tribunal Bench has already been confirmed by the Hon'ble Andhra Pradesh High Court and there is no contrary decision from any other High Court, in our opinion, we are bound to follow the decision of High Court. Therefore, following this decision we decide this issue against the Revenue. Deduction u/s 80-IA - Receipt as insurance receipt which was disallowed AO since the same was not derived from the eligible business of the assessee - HELD THAT:- This issue has not ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on of Section 139(5)? 4. Whether in the facts and circumstances of the case and in law, the Ld. CIT(A) has erred in allowing the deduction u/s 80-IA on the income of Rs. 3,89,767 received as insurance receipt which was disallowed by Assessing Officer since the same was not derived from the eligible business of the assessee. 3. Ground Nos. 1 to 3 : After hearing both the parties we find that during assessment proceedings the Assessing Officer noticed that assessee has shown in profit and loss account a sum of Rs. 2,43,40,143/- from sale of Carbon Emission Reduction Units (in short CER ). In response to queries, the assessee filed detailed reply. It was pointed out that because of the increasing accumulation of green house gases in the atmosphere leading to pollution, United Nations Framework Convention on Climate Change was conducted and an agreement was signed by various nations in Kyoto (in Japan). The same is known a Kyoto Protocol and is effective from 2005. Under this agreement various countries undertook to reduce emission of green house gases. It was also agreed that if some industries were set up which lead to emission of lesser green house gases than the standard ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... My Home Power Ltd at 365 ITR 82(A.P). He also pointed out that this decision has been followed by Chennai Bench in the case of Ambika Cotton Mills Ltd v DCIT 27 ITR (Trib) 44 (Chennai) and Sri Velayudhaswamy Spinning Mills P. Ltd v DCIT 27 ITR (Trib) 106 and Jaipur Bench of the Tribunal in the case of Shree Cement Ltd Vs. Addl CIT 31 ITR (Trib) 513. 7. We have considered the rival submissions carefully. The facts of the case are identical to the facts of the case decided by Hyderabad Bench of the Tribunal in the case of My Home Power Ltd Vs. DCIT (supra). In that case it was held as under:- Held, that carbon credit was in the nature of an entitlement received to improve world atmosphere and environment reducing carbon, heat and gas emissions. It was not an offshoot of business but an offshoot of environmental concerns. No asset was generated in the course of business. Credit for reducing carbon emission or greenhouse effect could be transferred to another party in need of reduction of carbon emission. It does not increase profits in any manner and does not need any expenses. It was in the nature of entitlement to reduce carbon emission, and there was no cost of acquisition ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t. 12. Before us Ld. DR supported the order of Assessing Officer. 13. On the other hand Ld. Counsel of the assessee submitted that assessee has got the insurance policy with reference to the total turnover. Since the total turnover fell, therefore, part of the premium was reduced which would have led to reduction in insurance expenditure? However, the assessee has shown the same as insurance receipts separately i.e why the Assessing Officer did not agree for the deduction u/s 80IA. He relied on the impugned order. 14. After considering the rival submissions we find that this issue has not been discussed in detail by Assessing Officer and CIT(A) in their respective orders. Therefore, if it is a case of refund of only insurance premium then assessee would be entitled to deduction u/s 80IA on this amount also. However, this fact need to be verified, therefore, we set aside the order of Ld. CIT(A) and direct the Assessing Officer to verify the nature of insurance receipts and if the same was in the Revenue field, then deduction u/s 80IA should be allowed otherwise the issue may be decided in accordance with law. 15. In the result appeal of the Revenue is partly allowed. ..... X X X X Extracts X X X X X X X X Extracts X X X X
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