On appeal, the CIT(A) held that the receipt from sale of carbon credits if power is generated and thus the gain derived was eligible for deduction u/s 80-IA(4).Aggrieved by the order, the Revenue filed an appeal before the Tribunal. The assessee also filed cross objection on the said. The assessee submitted that the Hon’ble Andhra Pradesh High Court in CIT v. My Home Power Ltd(2014) 365 ITR 82 (AP) (HC) had decided the issue of taxability of carbon credits in the favour of the assessee and the jurisdictional Bench in Shree Nakoda Ispat Ltd. in ITA No.109/BLPR/2011 had decided in favour of the assessee. Further, the assessee also pointed out that the Finance Act, 2017 w.e.f. 1st April, 2018 inserted section 115BBG for taxability of carbon credits @ 10% and that the amendment was prospective. The Tribunal admitted the ground raised by the assessee for adjudication and allowed the appeal of the assessee for statistical purposes. (AY. 2011-12)
DCIT v. Godawari Power & Ispat Ltd. (2018) 68 ITR 19(SN) (Raipur)(Trib.)
S. 4 : Charge of income-tax – Carbon credit -Capital or revenue -Additional ground -Receipt from sale of carbon credit is capital receipt-Not taxable as income – Additional ground was admitted and remanded the matter for verification. [S. 2(24), 80IA(4), 115BBG, 254(1)]