Commissioner Of Income Tax v. M/S.arun Textiles Pvt. Ltd

IN THE HIGH COURT OF JUDICATURE AT MADRAS DATED: 09.09.2019 CORAM THE HON'BLE DR.JUSTICE VINEET KOTHARIANDTHE HON'BLE MR.JUSTICE C.SARAVANAN Tax Case Appeal No.160 of 2015 Commissioner of Income Tax No.63, Race Course RoadCoimbatore. ... Appellant Vs. M/s.Arun Textiles Pvt. Ltd.No.80, Perumal Koil streetTirupur – 641 604.PAN:AABCA8982 D ... Respondent Tax Case Appeal filed under Section 260A of the Income TaxAct, 1961 against the order of the Income Tax AppellateTribunal, Madras 'B' Bench, dated 12.09.2014 made in ITANo.268/Mds/2014, as against the order of the Commissioner of Income Tax(Appeals)-II, Coimbatore made in IT Appeal No.233/11-12 dated11/12/2013 as against the order of the Assistant Commissioner ofIncome Tax Company Circle in PAN/GIR No.AABCA89821) dated23/12/2011 for the Assessment Year 2009-10. For Appellant : Mr.T.R.Senthil KumarSenior Standing Counselassisted by Ms.K.G.Usha RaniJunior Standing Counsel For Respondent : Mr.N.V.Balaji (Delivered by DR.VINEET KOTHARI,J) This Tax Case Appeal has been filed by the Revenue callingin question the correctness of the order passed by the Income https://hcservices.ecourts.gov.in/hcservices/ Tax Appellate Tribunal, Madras 'B' Bench, dated 12.09.2014 inITA No.268/Mds/2014, by raising the following substantialquestions of law:"1. Whether on the facts and circumstances ofthe case, the Tribunal was right in holding that theproceeds realized by the assessee on sale ofCertified Emission Reduction Credit, which theassessee had earned on the Clean DevelopmentMechanism in its wind energy operations, is acapital receipt and not taxable? 2.Whether, in the facts and circumstance of thecase and in law, the Appellate Tribunal is correctin holding that sale of Carbon Credits is to beconsidered as Capital Receipt and not liable for taxunder any head of income under Income Tax Act, 1961? 3. Whether, in the facts and circumstances ofthe case and in law, ITAT is correct in holding thatthere is no cost of acquisition or cost ofproduction to get entitlement for the CarbonCredits, without appreciating that generation ofCarbon Credits is intricately linked to themachinery and processes employed in the productionprocess by the assessee?” 2. When the matter is taken up for hearing, the learnedSenior Standing Counsel for the Department brought to our noticethe Circular instruction issued by the Central Board of DirectTaxes vide Circular No.17/2019, dated 8[th] August 2019, wherein,it is stipulated that appeals shall not be filed/pursued by theDepartment before the High Court in cases where the tax effectdoes not exceed Rs.1,00,00,000/- (Rupees One Crore only). 3. In the instant case, the tax effect is said to be lessthan the monetary limit imposed and therefore, the Appeal filedby the Revenue is dismissed, as not pressed, keeping open thesubstantial questions of law for determination in appropriatecases. No costs. Sd/- kj To 1.Income Tax Appellate TribunalMadras 'B' Bench, Chennai. Madras 'B' Bench, Chennai. 2.The Commissioner of Income Tax (Appeals-II), Coimbatore. 3.The Assistant of Income Tax Company Circle, Tiruppur. +1cc to Mr.N.V.Balaji, Advocate Sr.78195+1cc to Mr.T.R.Senthilkumar, Advocate Sr.78050TCA No.160 of 2015spd[co]srg 23/10/2019