a)The assessee received certain amount from sale of carbon credit issued by United Nations Framework Convention on Climate Change under Kyoto Protocol, generated in the gas turbine unit.
b)The assessee claimed that the income earned on sale of carbon credit was directly and inextricably linked to generation of power, therefore, the assessee was entitled to relief under section 80-IA.
c)The Assessing Officer and the DRP found that the income was not derived from eligible business, consequently, they held that the assessee was not eligible for deduction under section 80-IA. The aggrieved-assessee filed the instant appeal.
The Tribunal held in favour of revenue as under:
1)The income on sale of carbon credit was attributable to the business of the assessee. Since the carbon credit was conferred on the assessee under the scheme promoted by United Nations Framework Convention on climate change under Kyoto Protocol.
2)But it was not the direct source of income from the industrial undertaking of the assessee. At best, it could be said that it had a nexus with the business of the assessee or was attributable to the business of the assessee.
3)Therefore, the income on sale of carbon credit would form part of the profits and gains of business. However, it could not be treated as profit 'derived from' the industrial undertaking. Thus, the assessee was not entitled to deduction under section 80-IA.- APOLLO TYRES LTD. V. ASSTT. CIT  47 taxmann.com 416 (Cochin - Trib.)