RAJSHREE SUGARS & CHEMICALS LTD.,COIMBATORE vs. DCIT, COIMBATORE

This appeal by the assessee is arising out of the order of the Commissioner of Income Tax (Appeals)-1, Coimbatore in ITA Appeal No.350/14-15 dated 30.01.2017. The Assessment was framed by DCIT, Corporate Circle -2, Coimbatore U/s 143(3) of 2 the Income Tax Act, 1961 (hereinafter ‘the Act’) for the A.Y. 2012-13 vide order dated 19.02.2015.

The only issue in this appeal of assessee is as regards to the order of CIT(A) rejecting the ground on the amount received towards carbon credit by excluding from the total income, as being in the nature of capital receipt, as the same has not claimed before the AO in the return of income but claimed the same during the course of assessment proceedings. For this, assessee has raised various grounds which we need not to reproduce.

We have heard rival contentions and gone through facts and circumstances of the case. We noted that during the course of assessment proceedings before the AO, the assessee claimed that it had received a sum of Rs.4,28,24,080/- during the year towards carbon credit under Clean Development Mechanism (CDM) and incurred expenditure of Rs.16,82,828/- by way of registration fee. The assessee claimed that the amount of Rs.4,28,24,080/- should be excluded from the total business proceeds as the receipt is in the nature of capital and not revenue. The AO assessed the same as business income. Aggrieved, assessee preferred appeal before CIT(A) and the 3 CIT(A) also confirmed the action of the AO. Aggrieved, assessee is in appeal before the Tribunal.

We noted that this issue is covered in the favour of the assessee by the decision of Hon’ble High Court of Madras in the casea of S.P. Spinning Mills Pvt. Ltd. vs. ACIT, (2021) (1) TMI 1081 & CIT vs. Ambika Cotton Mills Ltd. [2021] 125 taxmann.com 206 and by the decision of Co-ordinate Bench of this Tribunal in assessee’s own case for the assessment year 2013-14 in order dated 13.02.2020. As the issue is squarely covered in assessee’s own case in ITA No. 754/Chny/2018, we consistently following the same allow this appeal of the assessee.

In the result, the appeal filed by the assessee is allowed.