Tribunal Upheld Assessment Re-Opening, Disallowed Loss Carry Forward

The Tribunal upheld the re-opening of assessment under Section 147 due to ineligibility to set off business loss and depreciation. The disallowance of the carry forward of loss of M/s.TTK Biomed Ltd. and gifts to medical practitioners was confirmed based on regulations and lack of proof of genuineness. Logo charges were upheld as revenue expenditure, and depot charges at 3% were deemed reasonable. Both assessee and revenue appeals were dismissed by the Tribunal in the order pronounced on 25th November 2016 at Chennai.

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Issues:
1. Re-opening of assessment under Section 147 of the Income Tax Act.
2. Carry forward of loss of M/s.TTK Biomed Ltd.
3. Disallowance of gift given to medical practitioners for promoting products.
4. Disallowance of logo charges.
5. Depot charges paid to M/s.TTK & Co.

Re-opening of Assessment:
The assessing officer re-opened the assessment under Section 147 due to the assessee not being eligible to set off business loss and depreciation of the amalgamated company. The Tribunal upheld the re-opening as it was done within four years and relevant aspects were not considered initially. The Tribunal found no reason to interfere with the lower authority's decision.

Carry Forward of Loss:
The issue of carry forward of loss of M/s.TTK Biomed Ltd. was considered, and the Tribunal referred to previous decisions against the assessee. The Tribunal upheld the disallowance based on earlier rulings, finding no grounds for interference.

Disallowance of Gift to Medical Practitioners:
The Tribunal analyzed the claim of gifts given to medical practitioners for promoting products. It highlighted regulations prohibiting such practices and emphasized the need to verify the genuineness of the gifts. The Tribunal held that the gifts were against public policy and Article 21 of the Constitution, as they aimed to influence medical practitioners. Due to lack of proof of genuineness, the Tribunal confirmed the lower authority's decision.

Disallowance of Logo Charges:
Regarding logo charges, the Tribunal examined the agreement between the assessee and M/s.T.T.Krishnamachari & Co. The Tribunal considered previous rulings and confirmed the logo charges as revenue expenditure based on the agreement, finding no reason to interfere with the lower authority's decision.

Depot Charges:
The issue of depot charges paid to M/s.TTK & Co. at 3% of sales was discussed. The assessing officer restricted the charges to 2%, but the CIT(A) allowed 3% based on previous decisions. The Tribunal upheld the CIT(A)'s decision, considering the charges reasonable and not excessive, in line with previous rulings.

In conclusion, all appeals filed by both the assessee and the revenue were dismissed by the Tribunal in its order pronounced on 25th November 2016 at Chennai.

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