No income tax payable on sales proceeds of Certified Emission Reduction Credit procured on Clean Development Mechanism

Last updated: 22 September 2021

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The Madras High Court has ruled that proceeds from the sale of Certified Emission Reduction (CER) Credits, obtained through the Clean Development Mechanism (CDM) from wind energy operations, are not subject to income tax. The court determined that carbon credits are environmental products, not commercial assets, and their sale represents a capital receipt rather than taxable business income.

Court :
ITAT Chennai

Brief :
In The Commissioner of Income Tax, Chennai v. M/S. Wescare (India) Ltd [Tax Case Appeal No.434 of 2021 dated September 02, 2021], the Commissioner of Income Tax, Chennai ("the Appellant") had filed an appeal under Section 260A of the Income Tax Act, 1961 ("the IT Act") against the order dated March 12, 2021 ("Impugned Order") passed in ITA No. 509/Chny/2017 on the file of the Income Tax Appellate Tribunal, Chennai Bench ("the ITAT") regarding the Assessment Year 2009-2010.

Citation :
Tax Case Appeal No.434 of 2021 dated September 02, 2021

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1 Year PLAN - Rs.~~1999~~

1799

(Excl. of GST ₹323)

2 Years PLAN - Rs.~~3499~~

3149

(Excl. of GST ₹566)

BEST VALUE

3 Years PLAN - Rs.~~4999~~

4499

(Excl. of GST ₹809)

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Judgement posted by

Bimal Jain

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FCA, FCS LLB with21 Yrs of Experience inTaxation Indirect and Direct: Education Qualification: B.Com (Hons) Chartered Accountants Company Secretary LLB Qualified SAP FI/CO Consultants Professional Membership: Chairmanof Indirect Tax Committee of PHD Chamber of Commerce Member of Indirec ... Read more

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