Case Law Details
CIT Vs Ambika Cotton Mills Ltd. (Madras High Court)
Whether on the facts and circumstances of the case, the Tribunal was right in holding that the proceeds realized by the assessee on sale of Certified Emission Reduction Credit, which the assessee had earned on the Clean Development Mechanisam in its wind energy operations, is a capital receipt and not taxable?
Carbon Credit is not an offshoot of business, but an offshoot of environmental concerns. No asset is generated in the course of business, but it is generated due to environmental concerns. It was also found that the carbon credit is not even directly linked with the power generation and the income is received by sale of the excess carbon credits. It was found that the Tribunal has rightly held that it is capital receipt and not business income.
FULL TEXT OF THE JUDGMENT/ORDER OF MADRAS HIGH COURT
Challenging the order passed in I.T.A.No.1836/Mds/2012 on the file of the Income Tax Appellate Tribunal, Chennai, “C” Bench for the Assessment Year 2009-10.
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