The Principal Commissioner Of ... vs Gujarat Fluorochemicals Ltd
2021 Latest Caselaw 910 Guj

       C/TAXAP/334/2020                                          ORDER



        IN THE HIGH COURT OF GUJARAT AT AHMEDABAD
              R/TAX APPEAL NO. 334 of 2020
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  THE PRINCIPAL COMMISSIONER OF INCOME­TAX, VADODARA­1
                          Versus
              GUJARAT FLUOROCHEMICALS LTD.
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Appearance:
MR.VARUN K.PATEL(3802) for the Appellant(s) No. 1
 for the Opponent(s) No. 1
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 CORAM: HONOURABLE MR. JUSTICE J.B.PARDIWALA
        and
        HONOURABLE MR. JUSTICE ILESH J. VORA
                     Date : 20/01/2021
                         ORAL ORDER

(PER : HONOURABLE MR. JUSTICE J.B.PARDIWALA

1. This Tax Appeal under Section 260A of the Income Tax Act, 1961 (for short "the Act, 1961") is at the instance of the Revenue and is directed against the order passed by the Income Tax Appellate Tribunal dated 10.10.2019 in M.A. No.229/AHD/2019 in the ITA/116/AHD/2016 for the A.Y. 2010­2011.

2. The Revenue has proposed the following solitary question of law:

"(a) Whether on the facts and in circumstance of the case, the learned ITAT has erred in law and on facts in treating the income from realization of carbon credits as capital in nature, despite the fact that the realization from carbon credits has been treated by the assessee itself as revenue income and offered to tax and in fact in actualities they are revenue receipt ?"

3. We have heard Mr. Varun K. Patel, the learned Sr. Standing Counsel appearing for the Revenue.

          C/TAXAP/334/2020                                          ORDER



  4. The     question of law as proposed was the very

same question raised by the Revenue against the very same assessee in Tax Appeal No.28 of 2019 decided by this Court vide judgment dated 17.06.2019. The relevant observations are as under:

26. The fifth question proposed by the revenue whether the income from the Carbon Credits is capital in nature. This issue is squarely covered by the following decisions:

(1) M/s. Alembic Ltd.

Tax Appeal No.553 & 554 of 2017

(2) CIT Vs. My Home Power Ltd.

[2014] 46 Taxmann.com 314

(3) Subhash Kabini Power Corporation Ltd. (KHC) [2016] 69 Taxmann.com 394

27. We quote the relevant observations made by this Court in the Alembic Limited (supra) as under:

"6. The last surviving question pertains to the treatment that the assessee's income from trading of carbon credits should be given. The Tribunal held that receipts should be in the nature of capital receipts and therefore, would not invite tax. This issue has been examined by two High Courts. The Karnataka High Court in case of CIT v. Subhash Kabini Power Corporation Ltd. reported in (2016) 385 ITR 592 (Karn) and Andhra Pradesh High Court in case of Commissioner of Incometax v. My Home Power Limited reported in (2014) 365 ITR 82 (AP) have held that receipts of carbon credit are in nature of revenue receipts. Following the decision of said two High Courts, this question is also not considered."

5. In view of the aforesaid, this appeal fails and is hereby dismissed.

(J. B. PARDIWALA, J)

(ILESH J. VORA,J) SUCHIT