Court sets aside order, remands for reconsideration. Appellant advised re: impact of orders under Section 154.

The court set aside the impugned order and remanded the matter to the Tribunal, allowing all contentions of the parties to be reconsidered. The appellant was advised to assess the impact of orders passed under Section 154 and decide on the continuation of the appeals before the CIT (Appeals) and the Tribunal based on satisfaction with the revisional orders.

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Issues:
1. Appeal against Tribunal's order dismissing appellant's appeal against CIT (Appeals) order.
2. Claim for deduction under Section 36(1)(iii) of the Income Tax Act, 1961.
3. Netting off interest income against interest expenses.
4. Claim for allowance of direct expenses under Section 57(iii) of the Income Tax Act, 1961.

Analysis:
1. The appellant appealed against the Tribunal's order which dismissed their appeal against the CIT (Appeals) order. The appeal focused on the denial of deduction under Section 36(1)(iii) of the Income Tax Act for the assessment year 2007-08.

2. The appellant claimed a deduction under Section 36(1)(iii) for loans secured for purchasing building and machinery. The assessment order was initially passed, and subsequent rectification reduced the assessed income. The Assessing Officer upheld the appellant's contention, reducing the taxable income further.

3. The issue of netting off interest income against interest expenses was raised. The appellant questioned the interpretation of Section 57(iii) of the Income Tax Act in this regard, seeking clarity on whether such netting off could be declined.

4. Another issue raised was the claim for allowance of direct expenses attributable to earning income from other sources under Section 57(iii) of the Income Tax Act. The appellant contested the denial of this claim based on the correct interpretation of the provisions.

5. The Tribunal and CIT (Appeals) did not consider the orders passed under Section 154, which were brought to their attention by the Income Tax Officer. The court refrained from expressing an opinion on the correctness or effect of these orders but emphasized their importance in the decision-making process.

6. The court suggested that the appellant could consider withdrawing or dismissing the appeals before the CIT (Appeals) and the Tribunal as infructuous in light of the orders passed under Section 154. The decision to pursue the appeal would depend on the appellant's satisfaction with the revisional orders under Section 154.

7. Ultimately, the court set aside the impugned order and remanded the matter to the Tribunal, keeping all contentions of the parties on merit open for further consideration and decision.

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