My Home Power Ltd v DCIT [ITA NO. 1114 (HYD.) OF 2009 dtd 2.11.2012] Hyderabad ITAT Background: Assessee had filed return of income for the assessment year under consideration on 28.2.2008 showing a loss of Rs. 86,54,970. The company is engaged in the business of power generation through biomass power generation unit. During the year under consideration it has received 1,74,037 Carbon Emission Reduction Certificates (CERs) popularly known as ‘carbon credits’ for the project activity of switching off fossil fuel from naphtha and diesel to biomass. It has sold 1,70,556 CERs to a foreign company M/s. Noble Carbon Credits Ltd., Ireland and had received an amount of Rs. 12.87 crores. The assessee had accounted this receipt as capital in nature and had not offered the same for taxation. The AO dealt in detail the taxability of sale proceeds arising out of the sale of CERs and held the same to be a revenue receipt since the CERs are a tradable commodity and even quoted in stock exchange. The CIT(A) confirmed the order of the AO and also gave a finding that the said income of the assessee cannot be considered as income from business for the purpose of entitlement for deduction u/s. 80IA of the Act.
Monthly Archives: November 2012
Genesys International Corpn. Ltd. v ACIT [ITA No.6903/Mum/2011 dtd 31.10.2012] Mumbai ITAT Background: Assessee has two undertakings, one located at SEEP2, Mumbai which is a SEZ unit and other located at Bangalore which is STPI unit. Both units are eligible for tax benefit under section 10A of the Act. The Finance Act, 2007 amended section 115JB with effect from 2008-09 for bringing the amount of income to which provisions of section 10A or 10B apply within the purview of MAT. Further, provisions of sub-section (6) of Section 115JB of the Act were inserted by Special Economic Zone Act, 2005 (SEZ Act) w.e.f. 10.2.2006 which provides that provisions of MAT would not apply to income from any business carried on by an entrepreneur or a developer in a unit or SEZ, as the case may be. The assessee reduced the income u/s 10A from MAT computation. The AO did not accept said contention of the assessee and held that the scope of Minimum Alternate Tax (MAT) was widened by including the income exempt u/s.10A/10B of the Income tax Act in the book profit. The AO stated that section 115JB(6) is applicable to an assessee claiming deduction under section 10AA of the Act and not an assessee claiming deduction under 10A of the Act. Ld CIT (A) after considering the submissions of assessee has confirmed the action of AO.