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Issues involved:
1. Whether depreciation should be allowed before deduction under Chapter VIA. 2. Correctness of remanding the case back to the Assessing Officer regarding interest income. Issue 1 - Depreciation and deduction under Chapter VIA: The appellant raised a question regarding the allowance of depreciation before allowing the deduction under Chapter VIA for the assessment year 2003-04. The assessee had not claimed depreciation while computing deductions under Chapter VIA up to the assessment year 2002-03. However, in the current assessment year, the assessee computed deductions under Chapter VIA after considering the allowable depreciation. The Assessing Officer contended that depreciation should be computed on the written down value of the asset based on earlier assessment years. The ITAT held that since the earlier orders thrusting depreciation upon the assessee had been deleted and attained finality, depreciation for the current year should be computed without considering the earlier thrust depreciation. Therefore, the first question raised by the Revenue was not entertained. Issue 2 - Remand of the case regarding interest income: The ITAT remanded the case back to the Assessing Officer with directions to follow the Special Bench decision in the case of Lalson Enterprises (89 ITD 25) regarding interest income. The High Court declined to entertain the second question raised by the Revenue, as the issue had been restored to the Assessing Officer's file. However, it was emphasized that while giving effect to the ITAT's order and passing a fresh order, the Assessing Officer should consider the judgment of the High Court in the case of CIT vs. Asian Star Ltd (326 ITR 56), which discussed the Special Bench decision in Lalson Enterprises. Consequently, the second question was also not entertained, and the appeal was dismissed with no order as to costs.
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