Appeal allowed for set-off, expenses disallowance dismissed, TDS verification remitted.

The Tribunal partially allowed the appeal, permitting the set-off of unabsorbed business losses and depreciation. The issue regarding the disallowance of expenses for the purchase of gifts for travel agents was dismissed due to withdrawal. The matter of disallowance for non-deduction of TDS under section 40(a)(ia) was remitted back to the AO for verification.

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Issues Involved:
1. Disallowance of unabsorbed business loss and unabsorbed depreciation against business income and long-term capital gains.
2. Disallowance of expenses for purchase of gifts for travel agents.
3. Disallowance of expenses for non-deduction of TDS under section 40(a)(ia) of the Income Tax Act.

Detailed Analysis:

1. Disallowance of Unabsorbed Business Loss and Unabsorbed Depreciation:
The first issue pertains to the disallowance of unabsorbed business loss and unabsorbed depreciation against business income and long-term capital gains. The CIT(A) confirmed the AO's action, noting that the appellant company had not claimed any business loss or unabsorbed depreciation in the returns for AYs 2007-08 to 2010-11. The CIT(A) also questioned the genuineness of the amalgamation, suggesting it was not carried out for the revival of the amalgamating company and did not serve a genuine business purpose as per section 72A of the Act.

The Tribunal found that the CIT(A)'s findings were incorrect. The assessee had provided detailed charts and supporting documents showing continuous claims of unabsorbed business losses and depreciation since AY 2001-02, which were accepted by the Income Tax Authorities. The Tribunal noted that the unabsorbed business losses and depreciation for AY 2011-12 were Rs. 6,07,11,696 and Rs. 7,56,29,069, respectively, contrary to the AO's claim of Rs. 18,86,074 and Rs. 1,09,22,427. The Tribunal also emphasized that the merger order by the Hon'ble Calcutta High Court was based on full consideration of the facts, and section 72A did not apply as the assessee was the amalgamated company, not the amalgamating company. Thus, the Tribunal allowed the set-off of the unabsorbed business losses and depreciation.

2. Disallowance of Expenses for Purchase of Gifts for Travel Agents:
The second issue involved the disallowance of Rs. 9,71,006 on account of purchases of gifts for travel agents. The CIT(A) restricted the disallowance to Rs. 1,00,000 on an ad hoc basis. The assessee withdrew this ground due to the smallness of the amount, and the Tribunal dismissed this issue accordingly.

3. Disallowance of Expenses for Non-Deduction of TDS under Section 40(a)(ia):
The third issue concerned the disallowance of Rs. 2,62,492 for non-deduction of TDS under section 40(a)(ia). The assessee claimed that TDS was deducted but could not provide the details at the relevant time. The Tribunal remitted the issue back to the AO for verification of TDS deduction, directing the AO to decide accordingly.

Conclusion:
The Tribunal allowed the appeal partly for statistical purposes, permitting the set-off of unabsorbed business losses and depreciation, dismissing the issue regarding the purchase of gifts due to withdrawal, and remitting the issue of TDS deduction back to the AO for verification.

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