Appeal partly allowed, grounds on deductions dismissed, disallowance remanded for reconsideration, claim allowed for statistical purposes.

The appeal was partly allowed. The tribunal dismissed the grounds related to deductions under section 80-IB and most issues under section 14A, while remanding the matter of disallowance under section 14A for reconsideration and allowing the claim under section 54G for statistical purposes.

---

---

Issues Involved:
1. Deduction under section 80-IB.
2. Disallowance under section 14A.
3. Exemption under section 54G.
4. Long Term Capital Gain under section 50B on slump sale of Polymer Division.

Detailed Analysis:

1. Deduction under section 80-IB:
- Issue: The assessee claimed deductions under section 80-IB for DEPB licenses, focus market incentives, and sundry income.
- Judgment: The appellate authority denied the deduction for DEPB licenses (Rs. 5,67,09,436) and focus market incentives (Rs. 3,74,09,929), stating these incomes do not constitute incomes "derived from" the industrial undertaking, aligning with the Supreme Court decision in Liberty India vs. CIT. The deduction for sundry income (Rs. 1,86,778) was also denied on similar grounds. Thus, Ground Nos. 1(a), (b), and (c) were dismissed.

2. Disallowance under section 14A:
- Issue: The assessee contested the disallowance of Rs. 26,22,666 made by the AO under section 14A, arguing that the suo-moto disallowance of Rs. 19,64,974 should be considered.
- Judgment: The tribunal acknowledged the assessee's plea regarding the suo-moto disallowance and remanded the matter to the AO for appropriate relief. The rest of the issues under Ground Nos. 2.1 to 2.3 were dismissed.

3. Exemption under section 54G:
- Issue: The assessee claimed exemption under section 54G for expenses incurred on shifting the industrial undertaking from Mahul to Valia, which was denied by the AO and CIT(A).
- Judgment: The tribunal admitted additional evidence, including confirmations from transporters and contractors, production details, and an affidavit from the company's director, which were not previously considered. The tribunal restored the issue to the AO to reassess the claim under section 54G, considering the new evidence. Ground No. 3 was allowed for statistical purposes only.

4. Long Term Capital Gain under section 50B:
- Issue: The assessee contested the reduction of Rs. 13,24,41,682 from the net worth of the undertaking at Valia while calculating long term capital gains under section 50B.
- Judgment: The tribunal did not provide a detailed analysis in the provided text, implying the issue might not have been separately adjudicated in this order.

Conclusion:
The appeal was partly allowed. The tribunal dismissed the grounds related to deductions under section 80-IB and most issues under section 14A, while remanding the matter of disallowance under section 14A for reconsideration and allowing the claim under section 54G for statistical purposes.

---