M/S Ajanta Private Limited vs Deputy Commissioner Of Income ...

on 7 March, 2018

Gujarat High Court

M/S Ajanta Private Limited vs Deputy Commissioner Of Income ... on 7 March, 2018
Bench: Akil Kureshi, B.N. Karia
C/TAXAP/683/2017 ORDER

IN THE HIGH COURT OF GUJARAT AT AHMEDABAD

TAX APPEAL NO. 683 of 2017

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M/S AJANTA PRIVATE LIMITED
Versus
DEPUTY COMMISSIONER OF INCOME TAX,
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Appearance:
DARSHAN R PATEL for the PETITIONER(s) No. 1
MRS MAUNA M BHATT for the RESPONDENT(s) No. 1
NOTICE NOT RECD BACK for the RESPONDENT(s) No. 1
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CORAM: HONOURABLE MR.JUSTICE AKIL KURESHI

and
HONOURABLE MR.JUSTICE B.N. KARIA

Date : 07/03/2018

ORAL ORDER

( P E R : H O N O U R A B L E M R . J U S T I C E A K I L K U R E S H I )
This appeal is filed by the appellant challenging judgment of the Income Tax Appellate
Tribunal. We frame the following substantial question of law :

"Whether on the facts and circumstances of the case, the

Tribunal has substantially erred in law in concluding that
an amount of Rs.1,24,51,176/− earned on sale of carbon
credits is a revenue receipt exigible to tax?

Issue pertains to taxability of the income earned by the

assessee through trading in surplus carbon credits. The Tribunal by the impugned judgment
h e l d t h a t s u c h i n c o m e i s i n t h e
nature of revenue receipt and therefore, liable to be taxed. The
grievance of the assessee is that the Tribunal in case of this very
same assessee in earlier years, had taken a different view, upon
which, the department had filed appeal before the High Court.

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 M/S Ajanta Private Limited vs Deputy Commissioner Of Income ... on 7 March, 2018

C/TAXAP/683/2017 ORDER Ignoring such a binding precedent, the Tribunal in the present case
had taken a contrary view. Apart from the principle of
judicial comity and law of precedence, we notice that this Court
has in the past, following the judgments of of Karnataka High Court in case of CIT v. Subhash
Kabini Power Corporation reported in (2016) 385 ITR 592(Karn) and Andhra Pradesh High
Court in case of Commissioner of Income−tax v. My Home
Power Limited reported in (2014) 365 ITR 82(AP) held the issue against the Revenue. In case of
PR Commissioner of Income Tax Vadodara−1 v. Alembic Limited (Tax Appeal No. 553/2017 and
connected matter, Order dated 28.8.2017), following observations were made :

"6. The last surviving question pertains to the treatment

that the assessee's income from trading of carbon credits
should be given. The Tribunal held that receipts should be
in the nature of capital receipts and therefore, would not invite tax. This issue
has been examined by two High Courts. The Karnataka High Court in
case of CIT v. Subhash Kabini Power Corporation Ltd. reported in
(2016) 385 ITR 592 (Karn) and Andhra Pradesh High Court in case of
Commissioner of Income−tax v. My Home Power Limited reported in
( 2 0 1 4 ) 3 6 5 I T R 8 2 ( A P ) h a v e
held that receipts of carbon credit are in nature of revenue receipts.
Following the decision of said two High Courts,
this question is also not considered."

In the result, Tax Appeal is allowed. The question is

answered in favour of the assessee. Judgment of the Tribunal to
the above extent is reversed. Tax Appeal is disposed of.

(AKIL KURESHI, J.) (B.N. KARIA, J.) raghu

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