The assessee, engaged in manufacturing wind turbine generators, gave effect to a scheme of amalgamation of three subsidiaries approved by the NCLT, recorded the excess of purchase consideration over net assets as goodwill and claimed depreciation thereon, and made a suo motu disallowance under section 14A on account of exempt income from investments; the AO denied depreciation on goodwill relying on various statutory provisions relating to transfer of assets in amalgamation, and also made a further disallowance under section 14A read with rule 8D, applying it to the computation of book profits under section 115JB by treating the amendment introduced by the Finance Act, 2022 as retrospective, both of which were confirmed by the CIT(A) except in relation to the NCLT issue. On appeal, the Tribunal held that since the Revenue had failed to challenge the NCLT’s approval of the amalgamation before the appropriate forum, it could not now raise the issue before the Tribunal; that the statutory provisions relied upon by the AO applied only to assets transferred from the amalgamating to the amalgamated company and not to goodwill generated as a fresh asset upon amalgamation, and such goodwill was accordingly eligible for depreciation; that no addition could be made to book profits under section 115JB based on disallowance computed under section 14A; that no disallowance under section 14A was warranted where the assessee’s own interest-free funds exceeded the investments yielding exempt income, and CBDT Circular No. 5 of 2014 could not override the express provisions of section 14A; that the amendment to section 14A by the Finance Act, 2022 was prospective and inapplicable to the years under consideration; and that in the absence of the AO recording the requisite dissatisfaction under section 14A(2) with the correctness of the assessee’s suo motu disallowance, no further disallowance under rule 8D could be made, and the additions were accordingly deleted. (AY. 2016-17,  2017-18)