Appeal partly allowed: Diminution in investment value added to profit, interest liability removed under Sections 234B and 234C.

The Tribunal partly allowed the appeal, confirming the addition back of diminution in the value of investment to book profit but deleting the interest liability under Sections 234B and 234C. The order was pronounced on May 22, 2014, in Chennai.

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Issues Involved:
1. Reopening of assessments under Section 147
2. Deduction of provision for diminution in value of investment under Section 115JB
3. Disallowance of interest expenditure and operating expenditure under Section 14A
4. Levy of interest under Sections 234B and 234C

Issue 1: Reopening of assessments under Section 147:
The Tribunal considered three appeals where the common ground raised was against the reopening of assessments under Section 147. While the Tribunal found the reassessment bad in law for the assessment year 2003-04, it upheld the reopening for the impugned appeal. The Tribunal dismissed the ground related to reopening but failed to consider other grounds raised on merits, leading to a Miscellaneous Petition for rectification. The Tribunal recalled the order to hear and dispose of the appeal on merits, bringing it up for a second hearing.

Issue 2: Deduction of provision for diminution in value of investment under Section 115JB:
The first issue raised was regarding the deduction of provision for diminution in the value of investment for computing book profit under Section 115JB. The Assessing Officer added back the provision based on a retrospective amendment in the Finance Act, 2009. The Tribunal analyzed the amendment's retrospective effect and the assessee's argument that diminution was not a separate provision but reduced from the current asset's value. The Tribunal concluded that the adjustment made by the assessee was covered by the retrospective amendment, justifying the addition back of diminution in the value of investment to the book profit.

Issue 3: Disallowance of interest expenditure and operating expenditure under Section 14A:
The second issue raised but not pressed by the assessee was the disallowance of interest and operating expenditure under Section 14A. This ground was dismissed as not pressed.

Issue 4: Levy of interest under Sections 234B and 234C:
The third issue was the levy of interest under Sections 234B and 234C, based on the tax determined in the income escaping assessment. The Tribunal, following a judgment of the Madras High Court, ruled in favor of the assessee. It held that the retrospective amendment causing additional liability could not have been foreseen by the assessee, thus deleting the interest liability under Sections 234B and 234C.

In conclusion, the Tribunal partly allowed the appeal, confirming the addition back of diminution in the value of investment to book profit but deleting the interest liability under Sections 234B and 234C. The order was pronounced on May 22, 2014, in Chennai.

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