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QUERY: A chemical company by installing sophisticated equipment for pollution control generates carbon credit. Carbon credit which is sold for Rs. 20/- crores. The Income tax Department is of the view that the proceeds are liable to tax under business income. The auditor is of the view that the income is taxable under capital gains.
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In My Home Power Ltd. v. DCIT [IT Appeal No. 1114 (Hyd.) of 2009 dt. Nov. 02, 2012] the Hyderabad Tribunal has held as under:

QUERY: A chemical company by installing sophisticated equipment for pollution control generates carbon credit. Carbon credit which is sold for Rs. 20/- crores. The Income tax Department is of the view that the proceeds are liable to tax under business income. The auditor is of the view that the income is taxable under capital gains.
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EXPERT:
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In My Home Power Ltd. v. DCIT [IT Appeal No. 1114 (Hyd.) of 2009 dt. Nov. 02, 2012] the Hyderabad Tribunal has held as under:

“Carbon credit is in the nature of an entitlement received to improve world atmosphere reducing carbon, heat and gas emissions.

QUERY: Our Housing Society is going for redevelopment by purchasing TDR in the name of society. Builder has offered us 1 crore as corpus fund and 1 crore for members fund @ 1 lakh each. We are 105 members I want to know the exact provision of I. T. Act and whether we need to pay Income Tax on such amount please quote any judgments if any?
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From the facts, it is clear that Hsg. Soc. is going for redevelopment. For which the society has purchased TDR. The said TDR it wants to give for development. For which the developer/builder gives Rs. 1/- crore to society as corpus fund and Rs. 1/- lakh cash to the members of the society.