ITAT Ranchi Judgments — July 2019

The Tribunal held that the reassessment proceedings were initiated without independent application of mind and without establishing a live link between tangible material and the belief that income had escaped assessment. Consequently, the reassessment and appellate orders were quashed.

The Tribunal upheld the CIT(A)'s decision to allow 50% of the disallowance on expenses, finding no reason to interfere. However, regarding the commission payment, the Tribunal held that since payments were below Rs. 5000 per day per person and to daily wage laborers without PAN, Section 194H was not applicable, thus disallowing the addition.

The Tribunal held that business expenses cannot be disallowed merely because no business income was declared, especially when other income was shown and expenses were consistently allowed in prior years. Interest under Sections 234A and 234B should be levied on returned income, not assessed income.