Entitlement earned for carbon credits is a capital receipt and cannot be taxed as a revenue receipt

Issue – In the assessment order, the Assessing Officer has held that (a) Carbon Credit is not a capital receipt, (b) cost of acquisition of Carbon Credit is NIL & (c) entire receipt is taxable as capital gain. However, in the computation, it has been added as Business income. Learned CIT(Appeals) has held that receipt from CER’s is in the nature of benefit arising from the business of the assessee and is taxable as ‘Business Income’ u/s Sec 28(iv) of the Act.