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The Tax Publishers Taxability of Certified Emission Reductions (CER) *Facts:* Assessee was in receipt of CER. Lower tax authorities held these as taxable. Aggrieved assessee appealed to ITAT - Held in favour of the assessee that CER was not taxable for the year in review as it was a capital receipt. *Applied:*My Home Power Ltd. v. DCIT, (2013) 151 TTJ 616 (Hyd-Trib) : 2013 TaxPub(DT) 0442 (Hyd-Trib) also affirmed by AP High Court in (2014)365 ITR 82 (AP) : 2014 TaxPub(DT) 2672 (AP-HC), Kalpataru Power Transmission Ltd. 2019-TIOL-1424-ITAT-AHM : 2019 TaxPub(DT) 4057 (Ahd-Trib), Pr. CIT v. L.H. Sugar Factory Pvt. Ltd. (2017) 392 ITR 568 (All.) : 2017 TaxPub(DT) 0798 (All-HC) *Note:* Section 115BBG in the Act which is effective from 1st April, 2018 and will accordingly apply from assessment year 2018-19 and subsequent years. The rate of taxation provided in said Section is 10% (in addition to applicable surcharge and education cess). This also corroborates the case of the assessee that CERs are not regular business receipts arising from business of the assessee and this fact has also been recognized by the Government and, therefore, need arose to bring a special provision under the Act and that too at concessional rate of tax. *Case:*SRF Ltd. v. ACIT 2023 TaxPub(DT) 778 (Delhi-Trib)

The Tax Publishers

Taxability of Certified Emission Reductions (CER)

Facts: Assessee was in receipt of CER. Lower tax authorities held these as taxable. Aggrieved assessee appealed to ITAT -

Held in favour of the assessee that CER was not taxable for the year in review as it was a capital receipt.

Applied:My Home Power Ltd. v. DCIT, (2013) 151 TTJ 616 (Hyd-Trib) : 2013 TaxPub(DT) 0442 (Hyd-Trib) also affirmed by AP High Court in (2014)365 ITR 82 (AP) : 2014 TaxPub(DT) 2672 (AP-HC), Kalpataru Power Transmission Ltd. 2019-TIOL-1424-ITAT-AHM : 2019 TaxPub(DT) 4057 (Ahd-Trib), Pr. CIT v. L.H. Sugar Factory Pvt. Ltd. (2017) 392 ITR 568 (All.) : 2017 TaxPub(DT) 0798 (All-HC)

Note: Section 115BBG in the Act which is effective from 1st April, 2018 and will accordingly apply from assessment year 2018-19 and subsequent years. The rate of taxation provided in said Section is 10% (in addition to applicable surcharge and education cess). This also corroborates the case of the assessee that CERs are not regular business receipts arising from business of the assessee and this fact has also been recognized by the Government and, therefore, need arose to bring a special provision under the Act and that too at concessional rate of tax.

Case:SRF Ltd. v. ACIT 2023 TaxPub(DT) 778 (Delhi-Trib)