Tribunal Partially Allows Appeal: Some Issues Remanded, Depreciation Disallowed, Interest and TDS Adjustments Reviewed.

The appeal was partly allowed, with multiple issues remanded to the AO for fresh adjudication or verification. The Tribunal upheld certain disallowances, such as depreciation on non-compete fees, while allowing others, including interest disallowance under section 36(1)(iii). Transfer pricing adjustments were partly allowed, and the computation of book profit under section 115JB was remanded for reconsideration. Short grants of TDS and interest under section 244A were also remanded for verification. The decision was pronounced beyond the 90-day period due to COVID-19, aligning with the Tribunal's interpretation of applicable rules and precedents.

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Issues Involved:
1. Disallowance of depreciation on non-compete fees.
2. Disallowance of depreciation on adoption of wrong actual cost of various fixed assets.
3. Disallowance of interest under section 36(1)(iii) of the Income Tax Act.
4. Addition on account of unutilized CENVAT credit under section 145A of the Income Tax Act.
5. Transfer pricing adjustments on international transactions.
6. Disallowance under section 14A of the Income Tax Act.
7. Addition of disallowance under section 14A for computing book profit under section 115JB of the Income Tax Act.
8. Short grant of tax deducted at source (TDS).
9. Short grant of interest under section 244A of the Income Tax Act.

Issue-wise Detailed Analysis:

1. Disallowance of Depreciation on Non-Compete Fees:
The Tribunal adjudicated grounds I and II together as they are interconnected. Ground I, regarding depreciation on non-compete fees allocated over various fixed assets, was dismissed as it was decided against the assessee in previous years. Ground II, concerning depreciation at 25% on non-compete fees, was allowed based on the Tribunal's consistent view in earlier years, treating non-compete fees as an intangible asset.

2. Disallowance of Depreciation on Adoption of Wrong Actual Cost of Various Fixed Assets:
The issue was restored to the Assessing Officer (AO) for de-novo adjudication, following the Tribunal's decision in the assessee's own case for the assessment year 2012-13. The AO had disallowed depreciation by treating the transaction as one of amalgamation and taking the written down value of transferred assets from the transferor company.

3. Disallowance of Interest under Section 36(1)(iii) of the Income Tax Act:
The Tribunal deleted the disallowance of interest on investments in subsidiary companies, as the investments were considered for business purposes. This decision was based on the Tribunal's and the Bombay High Court's consistent rulings in the assessee's favor in previous years.

4. Addition on Account of Unutilized CENVAT Credit under Section 145A of the Income Tax Act:
The issue was restored to the AO for fresh consideration, following the Tribunal's decision in the assessee's case for the assessment year 2012-13. The AO had made an addition for unutilized CENVAT credit, which the assessee argued was reflected in the tax audit report with a net impact of nil on the Profit & Loss Account.

5. Transfer Pricing Adjustments on International Transactions:
The Tribunal partly allowed the ground concerning TP adjustments on corporate guarantee commission and interest on loans to subsidiaries. The AO was directed to compute interest on interest-free loans at LIBOR plus 200 basis points and corporate guarantee commission at 0.5%, following the Tribunal's decision in the assessee's case for the assessment year 2012-13.

6. Disallowance under Section 14A of the Income Tax Act:
The issue of disallowance under section 14A read with Rule 8D was restored to the AO to give effect to the Dispute Resolution Panel's (DRP) directions. The DRP had directed the AO to delete a part of the disallowance, which was not reflected in the final assessment order.

7. Addition of Disallowance under Section 14A for Computing Book Profit under Section 115JB of the Income Tax Act:
The issue was restored to the AO for reconsideration in line with the Special Bench decision in ACIT vs. Vireet Investments Pvt. Ltd., which held that book profit computation under section 115JB should not include disallowance under section 14A read with Rule 8D.

8. Short Grant of Tax Deducted at Source (TDS):
The issue of short grant of TDS credit was restored to the AO for verification and correction as per actual records.

9. Short Grant of Interest under Section 244A of the Income Tax Act:
This ground was dismissed as it was consequential to the other issues.

Conclusion:
The appeal was partly allowed, with several issues restored to the AO for fresh adjudication or verification, and others decided in favor of the assessee based on consistent Tribunal and High Court rulings in previous years. The order was pronounced beyond the 90-day period due to the COVID-19 lockdown, as per the Tribunal's interpretation of the applicable rules and judicial precedents.

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