DCIT CENTRAL CIRCLE-31, NEW DELHI vs. MALANA POWER COMPANY LTD., NEW DELHI

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ITA 5055/DEL/2019Status: DisposedITAT Delhi04 May 2022AY 2013-142 pages

In favour of the assessee: the Revenue's appeal was dismissed. From the AI summary of this appeal.

AI SummaryDismissed

What did the Tribunal hold?

The Tribunal held that no disallowance under Section 14A was warranted as there was no exempt income. It also confirmed that carbon credits are capital receipts, as decided by a coordinate bench.

What were the facts?

The Revenue appealed against the CIT(A)'s order concerning disallowance under Section 14A and the treatment of carbon credits. The assessee had not earned any exempt income during the year.

What were the issues?

Whether disallowance under Section 14A is applicable when no exempt income is earned, and whether carbon credits constitute revenue or capital receipts.

Which sections of the Income-tax Act were involved?

Section 14A

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, DELHI BENCH ‘E’, NEW DELHI

Before: Dr. B. R. R. KumarSh. Anubhav Sharma

For Respondent: Ms. Rinku Singh, Sr. DR
Hearing: 04.05.2022Pronounced: 04.05.2022

Per Dr. B. R. R. Kumar, Accountant Member:

1.

The present appeal has been filed by the Revenue against the order of ld. CIT(A)-37, New Delhi dated 28.02.2019.

Disallowance u/s 14A:

2.

During the year, the assessee has not earned any exempt income, hence we hold that no disallowance is called for.

Carbon Credits:

3.

The issue of treatment of the Carbon Credits as revenue receipt of capital receipt stands adjudicated by the order of the Co-ordinate bench of the Tribunal in assessee’s own case in vide order dated 27.04.2018 wherein it was held that the Carbon Credits are to be considered as capital receipts. Vide the amendment brought with effect from 01.04.2018, the Government of India has allowed a concessionary tax rate of ten per cent for taxpayers who are earning an income by transfer of carbon credits is not applicable to the assessment year before us.

4.

In the result, the appeal of the Revenue is dismissed. Order Pronounced in the Open Court on 04/05/2022.

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