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TMI Blog2017 (2) TMI 800X X X X Extracts X X X X X X X X Extracts X X X X ..... nce of gift - Held that:- The citizen of this country deserves better medical treatment. The medical treatment shall be made available by the state at a reasonable cost. The practice of marketing the drugs or medical devices on extraneous consideration cannot be allowed to continue any further. Therefore, the gift said to be given by the assessee is against the public policy. Hence, even if the so called gift is genuine transaction, the same cannot be allowed as ‘business expenditure’ under Section 37 of the Income Tax Act. In the case before us, the genuineness of the gift is also not proved by the assessee by giving the name and address of the doctors to whom the gift was said to be given. Therefore, this Tribunal do not find any reason to interfere with the order of the lower authority and accordingly, the same is confirmed. Disallowance of logo charges - CIT-A allowed claim - Held that:- Under Income Tax Act, the partnership firm is an independent and separate assessable unit. Therefore, the assessee obtained a license from M/s.T.T.Krishnamachari & Co., for using the logo (ttk). In pursuant to the agreement, the assessee has paid 0.5% of the sales as logo charges. This Tribu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... opened the assessment under Section 147 on the ground that the assessee was not eligible to set off the business loss and depreciation of the amalgamated company. It is not in dispute that the assessment was re-opened within a period of four years from the end of the relevant assessment year. Moreover, the so called business loss and depreciation of the amalgamated company namely M/s.TTK Biomed Ltd. and TTK Medical Devices Ltd. was not considered by the assessing officer. Therefore, this Tribunal is of the considered opinion that the assessment was rightly re-opened by the assessing officer. Therefore, this Tribunal do not find any reason to interfere with the order of the lower authority and the same is confirmed. 5. The next ground of appeal is with regard to carry forward of loss of M/s.TTK Biomed Ltd. We heard Shri A.V.Sreekanth, the learned representative for the department and Shri Saroj Kumar Parida, the learned counsel for the assessee. This issue was considered by this Tribunal in the assessee s own case for the assessment year 2004-05 and this Tribunal found that a similar issue was decided against the assessee by this Tribunal for the assessment year 2000-01 in ITA No ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... fessional associates for marketing the drug and other medical products manufactured by the assessee. The question arises for consideration is whether the cost of the gift can be allowed as expenditure under Section 37 of the Income Tax Act while computing the tax of an income tax. Apparently, the gift was given to the medical practitioners and professional associates for prescribing the drugs and medical devices manufactured by the assessee to the respective patients. In order to prevent such practice in India, the Medical Council of India, in exercise of statutory power framed a regulation called Indian Medical Council (Professional Conduct, Etiquette and Ethics) Regulations, 2002. The sole object of enacting this regulation is to prohibit the medical practitioners and professional associates for prescribing the drugs and other medical devices only on the basis of the gift said to be given by the concerned manufacturing companies. For the purpose of allowing the claim of the assessee, it is necessary to examine the genuineness of the gift said to be given by the assessee. Merely, because the assessee claims that gift was given to the medical practitioners and professional associat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... not proved by the assessee by giving the name and address of the doctors to whom the gift was said to be given. Therefore, this Tribunal do not find any reason to interfere with the order of the lower authority and accordingly, the same is confirmed. 9. Now coming to the assessment year 2012-13, in the department appeal, the first ground of appeal is with regard to disallowance of logo charges. Shri A.V.Sreekanth, the learned department representative submitted that the assessee claimed logo charges of ₹ 1,35,42,344/-. On the basis of the agreement said to be entered into between the assessee and M/s.T.T.Krishnamachari Co., a partnership firm, the assessee obtained a license to use the logo (ttk). The assessee has paid 0.5% of the sales as logo charges during the year under consideration. The CIT(A) by placing reliance on the order of this Tribunal in the assessee s own case for the assessment year 2008-09 in ITA No.2030/Mds/2011, allowed the claim of the assessee. According to the learned representative, the logo charges paid by the assessee is not for business purposes and therefore, the same cannot be allowed. 10. We heard Shri Saroj Kumar Parida, the learned coun ..... X X X X Extracts X X X X X X X X Extracts X X X X
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