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Issues Involved:
1. Disallowance of deduction under section 80IA(4) on captive power plant. 2. Disallowance under section 14A towards interest and other expenses in relation to exempted income. 3. Disallowance of provision for bad debts for computing book profit. 4. Allowance of reduction of withdrawal from revaluation reserve for computing book profit. 5. Disallowance of deduction of wealth tax provision for computing book profit. 6. Confirming disallowance of deduction under section 80HHC for computing book profit. Issue-wise Detailed Analysis: 1. Disallowance of Deduction Under Section 80IA(4) on Captive Power Plant: The Revenue's appeal contested the deletion of disallowance under section 80IA(4) for the captive power plant. The Learned Commissioner of Income Tax (Appeals) had allowed the deduction following the ITAT's decision for Assessment Year 2003-04, which set the market value of electricity based on the price at which the assessee purchased electricity from the Electricity Board. The Tribunal confirmed the order of the Learned Commissioner of Income Tax (Appeals), finding no infirmity and dismissed the Revenue's ground of appeal. 2. Disallowance Under Section 14A Towards Interest and Other Expenses in Relation to Exempted Income: The Revenue appealed against the deletion of disallowance under section 14A. The Learned Commissioner of Income Tax (Appeals) had canceled the disallowance based on previous decisions, which held that the Assessing Officer must pinpoint expenditure incurred in relation to exempt income, rather than making an ad-hoc disallowance. The Tribunal, however, set aside the orders of the lower authorities and remanded the matter back to the Assessing Officer for re-adjudication in light of the Bombay High Court's decision in Godrej and Boyce Manufacturing Co. Ltd. v. P. K. Gupta. 3. Disallowance of Provision for Bad Debts for Computing Book Profit: The Revenue's appeal contested the deletion of disallowance of provision for bad debts. The Learned Commissioner of Income Tax (Appeals) had canceled the addition based on the ITAT's decisions in previous years. However, the Tribunal noted the retrospective amendment in section 115JB disallowing such provisions and restored the matter back to the Assessing Officer to allow the actual amount of bad debt claimed during the year while computing book profits. 4. Allowance of Reduction of Withdrawal from Revaluation Reserve for Computing Book Profit: The Revenue appealed against the allowance of reduction of withdrawal from the revaluation reserve. The Learned Commissioner of Income Tax (Appeals) had followed the ITAT's decision in the assessee's own case for Assessment Year 2003-04, allowing the reduction. The Tribunal found no specific defect in the order and confirmed the decision of the Learned Commissioner of Income Tax (Appeals), dismissing the Revenue's ground of appeal. 5. Disallowance of Deduction of Wealth Tax Provision for Computing Book Profit: The Revenue contested the deletion of disallowance of wealth tax provision. The Learned Commissioner of Income Tax (Appeals) had canceled the disallowance, following previous decisions which held that the provision for wealth tax does not fall within the items of the Explanation to section 115JB. The Tribunal upheld the decision of the Learned Commissioner of Income Tax (Appeals), confirming that the provision for wealth tax is an ascertained liability and should not be added back while computing book profit. 6. Confirming Disallowance of Deduction Under Section 80HHC for Computing Book Profit: The assessee's cross-objection challenged the disallowance of deduction under section 80HHC while computing book profits under section 115JB. However, the Tribunal noted that this issue did not arise out of the order of the Learned Commissioner of Income Tax (Appeals) and was not mentioned in the assessment order. Consequently, the Tribunal did not admit this ground of cross-objection, dismissing it as not arising out of the orders of the lower authorities. Conclusion: The Tribunal partly allowed the Revenue's appeal for statistical purposes by remanding certain issues back to the Assessing Officer for re-adjudication. The cross-objection filed by the assessee was dismissed. The Tribunal confirmed several decisions of the lower authorities, maintaining consistency with previous rulings and judicial pronouncements.
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