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

IN THE HIGH COURT OF JUDICATURE AT MADRAS DATED : 18.06.2020 CORAM : THE HONOURABLE MR.JUSTICE T.S.SIVAGNANAMANDTHE HONOURABLE MRS.JUSTICE PUSHPA SATHYANARAYANA TAX CASE APPEAL NO.1171 OF 2015 Commissioner of Income Tax,No.63, Race Course Road,Coimbatore. ...Appellant -vs- M/s.Arun Textiles Pvt. Ltd.,No.80, Perumal Koil Street,Tirupur-641 604.PAN: AAB CA 8982 D...Respondent Prayer:- APPEAL under Section 260A of the Income Tax Act, 1961 againstthe order dated 19.06.2015 made in I.T.A.No.2174/Mds/2015 on thefile of the Income Tax Appellate Tribunal 'D' Bench, Chennai forthe assessment year 2010-11. This Appeal filed against the Order of the Income TaxAppellate Tribunal Madras 'D' Bench, dated 19[th] June 2015 inI.T.A.No.2174/Mds/2015, Assessment Year 2010-11 against theCommissioner of Income Tax (Appeals)II, Coimbatore, dated30.06.2014 I.T.A.No.115/3-14 in PAN.No. in AssessmentYear 2010-11 against the Deputy Commissioner of Income TaxCompany Circle, Tirupur, I.T.No.65 in PAN.No. ,Assessment year 2010-2011. For Appellant:Mr.T.R.Senthil Kumar,Senior Standing Counsel &Ms.K.G.Usha Rani,Standing Counsel For Respondent:Served – No appearance Judgment was delivered by T.S.Sivagnanam,J. We have heard Mr.T.R.Senthil Kumar, learned Senior StandingCounsel and Ms.K.G.Usha Rani, learned Standing Counsel appearingfor the appellant-Revenue. 2. This appeal, filed by the Revenue under Section 260A ofthe Income Tax Act, 1961 is directed against the order dated19.06.2015 made in I.T.A.No.2174/Mds/2015 on the file of theIncome Tax Appellate Tribunal 'D' Bench, Chennai for theassessment year 2010-11. 3. The appeal was admitted on 09.12.2015, on the followingsubstantial questions of law:- “1. Whether on the facts and in thecircumstances of the case, the Tribunal was rightin holding that the proceeds realized by theassessee on sale of Certified Emission ReductionCredit, which the assessee had earned on the CleanDevelopment Mechanism in its wind energyoperations, is a capital receipt and not taxable?2. Whether, in the facts and circumstances ofthe case and in law, the Appellate Tribunal iscorrect in holding that sale of Carbon Credits isto be considered as Capital Receipt and not liablefor tax under any head of income under Income TaxAct, 1961?3. Whether, in the facts and circumstances ofthe case and in law, ITAT is correct in holdingthat there 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?” 4. The learned Senior Standing Counsel for the appellantsubmits that the above appeal is not pursued by the Revenue onaccount of the low tax effect in terms of Circular No.17/2019dated 08.8.2019 issued by the Central Board of Direct Taxes. Bythe said Circular, the monetary limit for filing or pursuing anappeal before the High Court has been increased to Rs.1 Crore.It is further submitted that the tax effect in this case is lessthan the threshold limit. 5. In the light of the said submissions, the above tax caseappeal is dismissed on account of the low tax effect. The https://hcservices.ecourts.gov.in/hcservices/ substantial questions of law framed are left open. In the eventthe tax effect is above the threshold limit fixed in the saidcircular, liberty is granted to the Revenue to make a mention tothis Court to restore the appeal to be heard and decided onmerits. Sd/- Assistant Registrar(CO-MDU)//True Copy// Sub Assistant RegistrarabrTo1.The Income Tax Appellate Tribunal 'D' Bench, Chennai.2.The Commissioner of Income Tax (Appeals)II,Coimbatore.3.The Deputy Commissioner of Income Tax,Coimbatore Circle, Tirupur.TCA.No.1171 of 2015VSNII(CO)CS/12/10/2020