The assessee with co-generation captive power division using bio fuel advantage,offered an amount as revenue receipt in return and went on to amend such treatment and claimed the same as a capital receipt at assessment stage in (2023] 106 ITR (Trib) 550 (ITAT[Amrit]).
In this case assessee having realised a value of some Rs.18 odd crores by sale of renewable energy certificates and energy saving certificates offered it to tax at special rate at 10% under section 115BBG (carbon credits sale) in the ITR. The DRP chose to tax it as normal Business income instead without any special rate treatment.
The assessee made amendment of its claim before the AO and CIT(A) and sought entire value to be capital receipt not chargeable.
Only in the later the ITAT allowed the claim duly amended by the assessee after filing the return accepting the argument that RECs/ESCs do not bear the character of income under section 2(24) and are not covered under section 115BBG of the Act as there is a mention of only carbon credits and also because even after the amendment under section 115BBG, the RECs/ESCs have not been included either in this section or in section 2(24) of the Act.
There is a clear indicator that treatments given in the return of income can be modified during the time of assessment and even thereafter may be agitated in appellate stage.