DCIT Circle 1(2)(1), Mumbai Vs. MSPL Ltd.

Parties Involved

Facts Summary

The present appeal has been preferred by the Revenue against the order dated 06/06/2025 passed by the learned Addl./JCIT(A)-7, Kolkata, arising out of the reassessment framed under section 143(3) read with section 147 of the Income-tax Act, 1961, for the assessment year 2011-12. The assessee, MSPL Ltd., had received Rs. 15,16,16,644/- on sale of Carbon Emission Reduction Certificates / Carbon Credits during the year under consideration. The assessee treated this receipt as capital in nature and excluded it from taxable income. However, the Assessing Officer held that the receipt was integrally connected with the business activity and constituted revenue income, making the impugned addition. On appeal, the learned CIT(A) deleted the addition, holding that the issue stood squarely covered in favour of the assessee.…

Legal Issues

• 1. Whether the amount received by the assessee on sale of carbon credits is a capital receipt or business income.

Judgment Outcome

Decided in favour of Assessee.

Precedents Relied Upon

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