DCIT, Coimbatore V. Bannari Amman Sugars Ltd., Coimbatore

ITA 1009/CHNY/2015

• Counselvise Citation: [2016] 132 COUNSELVISE.COM (IT) 9191 (ITAT-CHENNAI)
• Duration Of Justice: 1 year(s) 1 month(s) 1 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 06-06-2016
• Appeal Filed By: Department
• Bench Allotted: A
• Assessment Year: 2008-2009
• Appeal Filed On: 05-05-2015
• Court: TRIBUNAL
• Department Lawyers: P RADHA KRISHNANJ
• Keywords: Business income; Reasonable cause; Capital receipt; Revised return

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH : CHENNAI , . !' BEFORE SHRI CHANDRA POOJARI, ACCOUNTANT MEMBER AND SHRI G.PAVAN KUMAR, JUDICIAL MEMBER ./ I.T.A.NO.1009/MDS./2015 / ASSESSMENT YEAR : 2008-09 DEPUTY COMMISSIONER OF INCOME TAX, CORPORATE CIRCLE-I, 63-A, RACE COURSE ROAD, COIMBATORE. VS. M/S.BANNARI AMMAN SUGARS LTD., 1212,TRICHY ROAD, COIMBATORE 641 018. [PAN AAACB 8933 G ] ( #$ / APPELLANT) ( %&#$ /RESPONDENT) / APPELLANT BY : MR.P.RADHA KRISHNAN,JCIT,DR /RESPONDENT BY : MR.SAROJKUMAR PARIDA, ADVOCATE / DATE OF HEARING : 31 - 05 - 201 6 !' / DATE OF PRONOUNCEMENT : 06 - 06 - 2016 ' / O R D E R PER CHANDRA POOJARI, ACCOUNTANT MEMBER THIS APPEAL OF THE REVENUE IS DIRECTED AGAINST T HE ORDER OF THE COMMISSIONER OF INCOME-TAX (APPEALS)-1, COIMBATORE DATED 13.02.2015 PERTAINING TO ASSESSMENT YEAR 2008-09. ITA NO.1009/MDS./2015 :- 2 -: 2. THE REVENUE HAS RAISED THE FOLLOWING GROUNDS/A DDITIONAL GROUNDS FOR ADJUDICATION. 01. THE ORDER OF THE LD.CIT(A)-I, COIMBATORE IS AGA INST LAW AND FACTS OF THE CASE. 02. THE LEARNED CIT(A) HAS FAILED TO CONSIDER THAT THE CLEAN DEVELOPMENT MECHANISM (CDM) RECEIPTS ARE NOT SUBSIDIES, BUT A T RADING RECEIPT. THE LEARNED CIT(A) ALSO FAILED TO CONSIDER THAT THE CAR BON CREDITS HAVE THE ATTRIBUTES OF TRADABLE GOODS GIVING RISE TO TRADING PROFITS. 03. IN THE CASE OF TATA CONSULTANCY SERVICES VS. ST ATE OF ANDHRA PRADESH [2004] 141 TAXMAN 132 THE SUPREME COURT HELD THAT A PROPERTY WOULD BECOME GOODS PROVIDED IT HAS THE ATTRIBUTES THERE OF WITH REGARD TO (A) ITS UTILITY (B) CAPABILITY OF BEING BOUGHT AND SOLD AND (C) CAPABILITY OF BEING TRANSMITTED, TRANSFERRED, DELIVERED, STORED AND POS SESSED. THE CARBON CREDITS CAN BE CONSIDERED AS GOODS AS THEY HAVE ALL THE ATTRIBUTES OF GOODS AS LAID DOWN IN THE SAID DECISION OF THE HONBLE SU PREME COURT. THE APPROACH WAS ALSO REITERATED BY THE HONBLE SUPREME COURT IN THE CASE OF BHARAT SANCHAR NIGAM LTD. VS. UNION OF INDIA [2006] 282 ITR 273(SC). THEREFORE, THE CARBON CREDITS ARE GOODS AND ARE CAP ABLE OF BEING TRADED, GIVING RISE TO TRADING RECEIPTS THAT ARE REVENUE IN NATURE. 04. CARBON CREDITS HAVE ALMOST SIMILAR AS IN AN IMP ORT ENTITLEMENT THE SALE OF IMPORT ENTITLEMENT WAS HELD TO BE A REVENUE RECE IPT IN THE CASE OF GEORGE MAIJO & CO (VIZAG) 2.1 THE REVENUE RAISED THE ADDITIONAL GROUNDS AS F OLLOWS. (A) THE DECISION OF TE CIT(A) IS NOT SUSTAINABLE II I LAW BECAUSE THE LEARNED CIT(A) ALLOWED THE FRESH ALTERNATE CLAIM OF THE ASS ESSEE THAT THE CARBON CREDIT IS A CAPITAL RECEIPT, WHICH WAS ADMITTED WIT HOUT AFFORDING AN OPPORTUNITY UNDER RULE 46A(3) OF THE INCOME TAX RUL ES, 1962 TO THE ASSESSING OFFICER FOR APPRECIATING THE SAME. (B) THE LEARNED CIT(A) ERRED IN ALLOWING THE ASSESS EES CLAIM THAT THE CARBON CREDIT IS A CAPITAL RECEIPT WHEN THE ASSESSEE COMP ANY ITSELF HAS ADMITTED THE CARBON CREDIT AS NORMAL BUSINESS INCOME AND ANY FRESH CLAIM HAS TO BE ITA NO.1009/MDS./2015 :- 3 -: MADE BY WAY OF FILING A REVISED RETURN AS HELD BY T HE HONBLE SUPREME COURT IN THE CASE OF M/S. GOETZE (INDIA) LTD VS. CIT CITE D IN 284 ITR 323. (C) THE LEARNED CIT(A) FAILED TO NOTE THAT CARBON C REDIT CANNOT BE INCLUDED FOR THE PURPOSE OF 801A COMPUTATION, SINCE THE CARB ON CREDIT IS NOT DERIVED FROM BUSINESS BUT IS MERELY ATTRIBUTABLE TO BUSIN ESS AND THE HONBLE SUPREME COURT IN THE CASE OF M/S. LIBERTY INDIA VS. CIT(SC) DATED 31.8.2009 HELD THAT SECTION 801B/801A ARE A CODE BY THEMSELV ES AS THEY CONTAIN BOTH SUBSTANTIVE AS WELL AS PROCEDURAL PROVISIONS. SECTI ON 801A/801B ALLOWS DEDUCTION OF PROFITS AND GAINS DERIVED FROM THE ELI GIBLE BUSINESS ONLY. 2.2. THE LD. A.O HAS NOT FILED ANY PETITION FOR A DMISSION OF ADDITIONAL GROUNDS AND IN OUR OPINION, THE LD.A.O HAS NOT SHO WN ANY REASONABLE CAUSE FOR FILING THE ABOVE ADDITIONAL GROUNDS BELAT EDLY, HENCE NOT CONSIDERED FOR ADJUDICATION AND DISMISSED ACCORDING LY. 3. AFTER HEARING BOTH THE SIDES, WE ARE OF THE OPI NION THAT SIMILAR ISSUE WAS CONSIDERED BY THIS TRIBUNAL IN TH E CASE OF ACIT VS. M/S.TAMIL NADU NEWSPRINT & PAPERS LTD.,CHENNAI IN I TA NO.259/MDS./15 & CO NO.42/MDS./15 FOR ASSESSMENT YE AR 2010-11 VIDE ORDER DATED 16.10.2015 FOLLOWING THE JUDGEMENT OF ANDHRA PRADESH HIGH COURT IN THE CASE OF CIT VS. M/S.MY HO ME POWER LTD., REPORTED IN [2014] 365 ITR 82(AP) HELD AS UNDER:- 13. WE HAVE HEARD BOTH THE PARTIES AND PERUSED TH E MATERIAL ON RECORD. IN OUR OPINION, SIMILAR ISSUE W AS DECIDED BY THE ANDHRA PRADESH HIGH COURT IN THE CASE OF CIT VS. M/S.MY HOME POWER LTD.,(SUPRA), WHEREIN IT WAS HELD THAT ITA NO.1009/MDS./2015 :- 4 -: INCOME RECEIVED FROM SALE OF CARBON CREDIT IS CONSI DERED AS CAPITAL RECEIPT AND NOT BUSINESS RECEIPT AND NOT LI ABLE FOR TAX UNDER THE ACT. ACCORDINGLY, WE AGREE WITH THE FINDI NG OF THE CIT(A) ON THIS GROUND AND DISMISS THE GROUND OF APP EAL TAKEN BY REVENUE. IN VIEW OF THE ABOVE, WE ARE INCLINED TO DISMISS T HE REVENUES APPEAL ON SIMILAR LINE. 4. IN THE RESULT, THE APPEAL OF THE REVENUE IS DIS MISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 06 TH JUNE, 2016, AT CHENNAI. SD/ - SD/ - ( . ) ( G.PAVAN KUMAR ) / JUDICIAL MEMBER ( ) (CHANDRA POOJARI) / ACCOUNTANT MEMBER #$ / CHENNAI %& / DATED: 06 TH JUNE, 2016 K S SUNDARAM &'(()*( +* / COPY TO: ( 1 . / APPELLANT 4. ( , / CIT 2. / RESPONDENT 5. *-. (/ / DR 3. ( ,(0 1 / CIT(A) 6. .2(3 / GF