PR.COMMISSIONER OF INCOME TAX-1 vs. M/S SUBASH KABINI POWER CORPORATION LTD

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ITA/686/2023HC KarnatakaKAHC01064208202324 September 2025Bench: S.G.PANDIT,K. V. ARAVIND4 pages
AI SummaryDismissed

What did the High Court hold?

The High Court held that the first substantial question of law was squarely covered by its previous judgment in the assessee's case. Consequently, the second question also did not arise for consideration, and the appeal was dismissed.

What were the facts?

The Revenue appealed against an ITAT order that held income from 'Sale of Carbon Credit' was not taxable income and should be excluded for book profit computation. The ITAT had followed a previous High Court decision in the assessee's own case.

What were the issues?

Whether income from sale of carbon credits is taxable revenue and whether it should be excluded for book profit computation under Section 115JB.

Which sections of the Income-tax Act were involved?

Section 115JB,Section 260-A

AI-generated summary — verify with the full judgment below

Cases cited in this judgment(1)Show list

Detected automatically from the text. Citations are also linked where they appear in the judgment. The count shows how many other judgments on BharatTax rely on the same authority.

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HC-KAR NC: 2025:KHC:38437-DB ITA No. 686 of 2023

IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 24TH DAY OF SEPTEMBER, 2025 PRESENT THE HON'BLE MR. JUSTICE S.G.PANDIT AND THE HON'BLE MR. JUSTICE K. V. ARAVIND INCOME TAX APPEAL NO. 686 OF 2023 BETWEEN:

1.

PR. COMMISSIONER OF INCOME TAX-1 BMTC COMPLEX, KORMANGALA, BANGALORE.

2.

THE DEPUTY COMMISSIONER OF INCOME, CIRCLE 6(1)(2), BANGALORE. …APPELLANTS (BY SRI. E I SANMATHI., SENIOR STANDING COUNSEL)

AND:

M/S. SUBASH KABINI POWER CORPORATION LTD WING SOUTH PORTIION, CRISTU COMPLEX, 5TH FLOOR, NO.41/7, LAVELLE ROAD, BENGALURU-560001. …RESPONDENT (NOTICE HELD SUFFICIENT VIDE ORDER DATED 10.02.2025 - UNREPRESENTED)

THIS INCOME TAX APPEAL PREFERRED UNDER SECTION 260-A OF THE INCOME-TAX ACT, 1961 ARISING OUT OF ORDER DATED 17/03/2022 PASSED IN ITA NO.350/BANG/2020, FOR THE ASSESSMENT YEAR 2011-2012.

Digitally signed by SUMA B N Location: HIGH COURT OF KARNATAKA

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HC-KAR NC: 2025:KHC:38437-DB ITA No. 686 of 2023

PRAYING THAT THIS HONBLE COURT MAY BE PLEASED TO(1) DECIDE THE FOREGOING QUESTION OF LAW AND / OR SUCH OTHER QUESTIONS OF LAW AS MAY BE FORMULATED BY THE HONBLE COURT AS DEEMED FIT AND SET ASIDE THE APPELLATE ORDER DATED 17/03/2022 PASSED BY THE INCOME TAX APPELLATE TRIBUNAL, A BENCH, BENGALURU, AS SOUGHT FOR, IN THE RESPONDENT-ASSESSEES CASE, IN APPEAL PROCEEDINGS IN ITA NO. 350/BANG/2020 FOR A.Y.20112012 ANNEXURE-A) AND ETC.,

THIS APPEAL, COMING ON FOR ADMISSION, THIS DAY, JUDGMENT WAS DELIVERED THEREIN AS UNDER:

CORAM: HON'BLE MR. JUSTICE S.G.PANDIT and HON'BLE MR. JUSTICE K. V. ARAVIND

ORAL JUDGMENT (PER: HON'BLE MR. JUSTICE K. V. ARAVIND)

This appeal by the revenue assailing the order dated 17.03.2022 in ITA No.350/Bang/2020 for the assessment year 2011-12.

2.

The following substantial questions arise in the appeal: ''1. Whether on the facts and circumstances of the case, the Hon'ble Tribunal is right in law in accepting contention of assessee that the amount shown as 'Sale of Carbon Credit' does not represent any income in the process or during course of business inasmuch as carbon credit is not an offshoot of business but an offshoot of environmental concerns ignoring that profit from sale of carbon credit is in nature of Revenue receipts and not capital in nature"?

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HC-KAR NC: 2025:KHC:38437-DB ITA No. 686 of 2023

2.

Whether on the facts and circumstances of the case, the Hon'ble Tribunal is right in law in relying upon decision in case of JSW Steel Ltd v/s ACIT (ITA no.923/Bang/2009 dated 13/1/2017) to hold that income from carbon credits should be excluded for purpose of computing book profits under section 115JB of the Act?''

2.

At the outset we notice that the issue raised in first question of law is answered by this Court in the case of the assessee reported in 385 ITR 592. The Tribunal following the order in the case of the assessee rendered by this Court has held against revenue and in favour of the assessee.

3.

Sri. E.I. Sanmathi, learned Senior standing counsel appearing for the appellants submits that the controversy on that issue has not reached finality and the appeal is pending consideration before the Hon'ble Apex Court. Hence, he prays to admit this appeal.

4.

On perusal of the substantial question of law and findings recorded by the Tribunal, we are not incline to admit this appeal.

5.

The first question raised in the appeal is squarely covered by the judgment of this Court in 385 ITR 592. It is

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HC-KAR NC: 2025:KHC:38437-DB ITA No. 686 of 2023

not the case of the revenue that there is change in facts or in law to take a different view.

6.

In the light of the above facts, no substantial questions of law would arise. Further, in view of answer to first substantial question of law and also in the light of the judgment in 385 ITR 592 the second substantial question of law would not arise for consideration. Accordingly, appeal is dismissed.

Sd/- (S.G.PANDIT) JUDGE

Sd/- (K. V. ARAVIND) JUDGE

RL List No.: 1 Sl No.: 13

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