Mysore Fertiliser Co. v. CIT

59 ITR 268High Court1966#4703 most cited

What is Mysore Fertiliser Co. v. CIT authority for?

Income-tax assessments made to the best of the Assessing Officer's judgment must be legal and regular, not arbitrary, vague, or fanciful. The assessment must be based on reason and justice, following established legal principles rather than private opinion or whim.

25

judgments rely on this decision, according to BharatTax’s citation analysis of 366,339 Indian tax judgments — from 2018 to 2026.

Also referred to as

Mysore Fertiliser Co. v. CIT · 59 ITR 268 · assessment to the best of judgment · legal and regular assessment · arbitrary assessment · vague assessment · fanciful assessment · reason and justice · income tax assessment procedure

Sections most often in play

Section 145(3)Section 69ASection 10(1)Section 132Section 133ASection 142(1)Section 143(1)Section 143(2)

Judgments citing Mysore Fertiliser Co. v. CIT

Deputy Commissioner of Income Tax, Central Circle, Belagavi vs. Shri Idrees Mohammed, Kalaburagi

The appeal of the Revenue is partly allowed in aforestated terms

ITA 149/PAN/2023[2017-18]Status: DisposedITAT Panaji01 Apr 2026AY 2017-18

Bench: Hon’Ble Shri Pavan Kumar Gadale & Shri G. D. Padmahshaliassessment Years: 2017-2018 Dy. Commissioner Of Income Tax, Central Circle, Belagavi, . . . . . . . Appellant V/S Idrees Mohammed Shop No. 4Cc, New Vegetable Market, Main Road, Kalaburagi, Karnataka-585101. Pan: Aajpi7572E . . . . . . . Respondent Represented Assessee By: Mr Ramesh Mudhol [‘Ld. Ar’] Revenue By: Mr Sashi Saklani [‘Ld. Dr’] Date Of Conclusive Hearing : 11/03/2026 Date Of Pronouncement : 01/04/2026 Order Per G. D. Padmahshali; This Appeal Is Filed By The Revenue U/S 253(2) Of The Income-Tax

For Appellant: Mr Ramesh Mudhol [‘Ld. AR’]For Respondent: Mr Sashi Saklani [‘Ld. DR’]
Section 132Section 133ASection 143(1)Section 143(2)Section 143(3)Section 145(3)Section 246ASection 250Section 253(2)Section 69A

…pugned addition, the Ld. CIT(A) in sum & substance based his adjudication on the reasonability of profit margin by placing reliance on ‘Mysore Fertilisers & Co. Vs CIT’ ITAT-Panaji Page 21 of 30 DCIT Vs Idrees Mohammed ITA No. 149/PAN/2023 AY: 2017-18 [1966, 59 ITR 268 (Mad)] and ‘CIT Vs Surjit Sing Mahesh Kumar’ [1994, 210 ITR 83 (All)]. 6.5 Section 145(3) of the Act deal with rejection of books and for the purpose of adjudication we deem it apt to reproduce provision in verbum to gather meaning & intent thereof; Section 145 : Method of accounting. (3) Where the Assessing Officer is not satisfied about the co…

ACIT, Central Circle-1, Patna vs. Piyush & Associates Private Limited, Patna

ITA 99/PAT/2021[2013-14]Status: DisposedITAT Patna21 Oct 2024AY 2013-14

Bench: Shri Sanjay Garg & Dr. Manish Boradi.T.A. No.99/Pat/2021 Assessment Year: 2013-14 Acit, Central Circle -1 Piyush & Associates Private Ltd. Patna, 6Th Floor, C.R. (Annexee) Vs Pirmohani, Kadamkuan, Patna, Building, Bir Chand Patel Path, Bihar-800003 Patna-800001 [Pan : Aadcp3041N] अपीलार्थी/ (Appellant) प्रत्‍यर्थी/ (Respondent)

For Appellant: Shri Nishant Maitin, CAFor Respondent: Shri Rinku Singh, CIT DR
Section 132Section 143(2)Section 153ASection 250

…ed. It is established legal position that audited financial statements furnished by assessee can only be disturbed once any anomaly is found therein and the books of account of the assessee are rejected by Id AO. In case of Mysore Fertiliser Co. v. CIT [1966] 59 ITR 268 (Mad) it was held that the ITO shall make the assessment to the best of his Judgement, it means that he must make it according to the rules of reason and justice, not according to private opinion, but according to law and not humour, and the assessment is to be not arbitrary, vague and fanciful, but legal and regular. In case of CIT v. Eastern Com…

Prominent Financial Advisory Pvt Ltd, Kolkata vs. ACIT, Central Circle-1, Patna

ITA 80/PAT/2021[2016-17]Status: DisposedITAT Patna21 Oct 2024AY 2016-17

Bench: Shri Sanjay Garg & Dr. Manish Boradi.T.A. No.99/Pat/2021 Assessment Year: 2013-14 Acit, Central Circle -1 Piyush & Associates Private Ltd. Patna, 6Th Floor, C.R. (Annexee) Vs Pirmohani, Kadamkuan, Patna, Building, Bir Chand Patel Path, Bihar-800003 Patna-800001 [Pan : Aadcp3041N] अपीलार्थी/ (Appellant) प्रत्‍यर्थी/ (Respondent)

For Appellant: Shri Nishant Maitin, CAFor Respondent: Shri Rinku Singh, CIT DR
Section 132Section 143(2)Section 153ASection 250

…ed. It is established legal position that audited financial statements furnished by assessee can only be disturbed once any anomaly is found therein and the books of account of the assessee are rejected by Id AO. In case of Mysore Fertiliser Co. v. CIT [1966] 59 ITR 268 (Mad) it was held that the ITO shall make the assessment to the best of his Judgement, it means that he must make it according to the rules of reason and justice, not according to private opinion, but according to law and not humour, and the assessment is to be not arbitrary, vague and fanciful, but legal and regular. In case of CIT v. Eastern Com…

Prominent Financial Advisory Pvt Ltd, Kolkata vs. ACIT, Central Circle-1, Patna

ITA 79/PAT/2021[2015-16]Status: DisposedITAT Patna21 Oct 2024AY 2015-16

Bench: Shri Sanjay Garg & Dr. Manish Boradi.T.A. No.99/Pat/2021 Assessment Year: 2013-14 Acit, Central Circle -1 Piyush & Associates Private Ltd. Patna, 6Th Floor, C.R. (Annexee) Vs Pirmohani, Kadamkuan, Patna, Building, Bir Chand Patel Path, Bihar-800003 Patna-800001 [Pan : Aadcp3041N] अपीलार्थी/ (Appellant) प्रत्‍यर्थी/ (Respondent)

For Appellant: Shri Nishant Maitin, CAFor Respondent: Shri Rinku Singh, CIT DR
Section 132Section 143(2)Section 153ASection 250

…ed. It is established legal position that audited financial statements furnished by assessee can only be disturbed once any anomaly is found therein and the books of account of the assessee are rejected by Id AO. In case of Mysore Fertiliser Co. v. CIT [1966] 59 ITR 268 (Mad) it was held that the ITO shall make the assessment to the best of his Judgement, it means that he must make it according to the rules of reason and justice, not according to private opinion, but according to law and not humour, and the assessment is to be not arbitrary, vague and fanciful, but legal and regular. In case of CIT v. Eastern Com…

Piyush & Associates Private Limited, Patna vs. ACIT, Central Circle-1, Patna

ITA 78/PAT/2021[2018-19]Status: DisposedITAT Patna21 Oct 2024AY 2018-19

Bench: Shri Sanjay Garg & Dr. Manish Boradi.T.A. No.99/Pat/2021 Assessment Year: 2013-14 Acit, Central Circle -1 Piyush & Associates Private Ltd. Patna, 6Th Floor, C.R. (Annexee) Vs Pirmohani, Kadamkuan, Patna, Building, Bir Chand Patel Path, Bihar-800003 Patna-800001 [Pan : Aadcp3041N] अपीलार्थी/ (Appellant) प्रत्‍यर्थी/ (Respondent)

For Appellant: Shri Nishant Maitin, CAFor Respondent: Shri Rinku Singh, CIT DR
Section 132Section 143(2)Section 153ASection 250

…ed. It is established legal position that audited financial statements furnished by assessee can only be disturbed once any anomaly is found therein and the books of account of the assessee are rejected by Id AO. In case of Mysore Fertiliser Co. v. CIT [1966] 59 ITR 268 (Mad) it was held that the ITO shall make the assessment to the best of his Judgement, it means that he must make it according to the rules of reason and justice, not according to private opinion, but according to law and not humour, and the assessment is to be not arbitrary, vague and fanciful, but legal and regular. In case of CIT v. Eastern Com…

ACIT, Central Circle-1, Patna vs. Prominent Financial Advisory Pvt Ltd, Kolkata

ITA 103/PAT/2021[2017-18]Status: DisposedITAT Patna21 Oct 2024AY 2017-18

Bench: Shri Sanjay Garg & Dr. Manish Boradi.T.A. No.99/Pat/2021 Assessment Year: 2013-14 Acit, Central Circle -1 Piyush & Associates Private Ltd. Patna, 6Th Floor, C.R. (Annexee) Vs Pirmohani, Kadamkuan, Patna, Building, Bir Chand Patel Path, Bihar-800003 Patna-800001 [Pan : Aadcp3041N] अपीलार्थी/ (Appellant) प्रत्‍यर्थी/ (Respondent)

For Appellant: Shri Nishant Maitin, CAFor Respondent: Shri Rinku Singh, CIT DR
Section 132Section 143(2)Section 153ASection 250

…ed. It is established legal position that audited financial statements furnished by assessee can only be disturbed once any anomaly is found therein and the books of account of the assessee are rejected by Id AO. In case of Mysore Fertiliser Co. v. CIT [1966] 59 ITR 268 (Mad) it was held that the ITO shall make the assessment to the best of his Judgement, it means that he must make it according to the rules of reason and justice, not according to private opinion, but according to law and not humour, and the assessment is to be not arbitrary, vague and fanciful, but legal and regular. In case of CIT v. Eastern Com…

ACIT, Central Circle-1, Patna vs. Prominent Financial Advisory Pvt Ltd, Kolkata

ITA 102/PAT/2021[2016-17]Status: DisposedITAT Patna21 Oct 2024AY 2016-17

Bench: Shri Sanjay Garg & Dr. Manish Boradi.T.A. No.99/Pat/2021 Assessment Year: 2013-14 Acit, Central Circle -1 Piyush & Associates Private Ltd. Patna, 6Th Floor, C.R. (Annexee) Vs Pirmohani, Kadamkuan, Patna, Building, Bir Chand Patel Path, Bihar-800003 Patna-800001 [Pan : Aadcp3041N] अपीलार्थी/ (Appellant) प्रत्‍यर्थी/ (Respondent)

For Appellant: Shri Nishant Maitin, CAFor Respondent: Shri Rinku Singh, CIT DR
Section 132Section 143(2)Section 153ASection 250

…ed. It is established legal position that audited financial statements furnished by assessee can only be disturbed once any anomaly is found therein and the books of account of the assessee are rejected by Id AO. In case of Mysore Fertiliser Co. v. CIT [1966] 59 ITR 268 (Mad) it was held that the ITO shall make the assessment to the best of his Judgement, it means that he must make it according to the rules of reason and justice, not according to private opinion, but according to law and not humour, and the assessment is to be not arbitrary, vague and fanciful, but legal and regular. In case of CIT v. Eastern Com…

Rakesh Vyas, Jaipur vs. Income Tax Officer, Jaipur

In the result the appeal of the assessee is allowed

ITA 295/JPR/2024[2017-18]Status: DisposedITAT Jaipur18 Jun 2024AY 2017-18

Bench: DR. S. SEETHALAKSHMI (Judicial Member)

For Appellant: Sh. S. L. Poddar (Adv.)For Respondent: Sh. Rajesh Kumar Meena, (Addl. CIT)
Section 142(1)Section 143(2)Section 144Section 69A

…state of trade in the locality or with any special circumstances of the assessee which warrant higher rate of profits. However, the ITO must disclose the basis and manner of computation and make his order a speaking order. (3) Mysore Fertilizer Co. CIT (1966) 59 ITR 268 (Mad) Held that Estimation must not be arbitrary, vague and fanciful , but must be legal and regular. The law says that the ITO shall make the assessment to the best of his judgment ; it means that he must make it according to the rules of reason and justice, not according to private opinion, but according to law and not humour and the assessment…

Assistant Commissioner of Income Tax, Central Circle-1, Guwahati vs. Abci Infrastructures Private Limited, Kolkata

In the result, the appeal of the assessee for Assessment Year

ITA 2/GTY/2023[2014-15]Status: HeardITAT Guwahati05 Apr 2023AY 2014-15

Bench: Sri Rajpal Yadav(Kz) & Dr. Manish Borad

Section 143(3)Section 250Section 44A

…nce of 0.64% of the sales revenue which is again on estimate basis and, therefore, the finding of ld. CIT(A) sustaining estimated disallowance cannot be accepted. We find support from the following decisions: “1. In case of Mysore Fertiliser Co. v. CIT [1966] 59 ITR 268 (Mad.) it was held that the ITO shall make the assessment to the best of his Judgement; it means that he must make it according to the rules of reason and justice, not according to private opinion, but according to law and not humour, and the assessment is to be not arbitrary, vague and fanciful, but legal and regular. Page 14 of 114 I.T.A. No.:…

Abci Infrastructures Private Limited, Kolkata vs. Assistant Commissioner of Income Tax, Central Circle-1, Guwahati

In the result, the appeal of the assessee for Assessment Year

ITA 43/GTY/2022[2014-15]Status: HeardITAT Guwahati05 Apr 2023AY 2014-15

Bench: Sri Rajpal Yadav(Kz) & Dr. Manish Borad

Section 143(3)Section 250Section 44A

…nce of 0.64% of the sales revenue which is again on estimate basis and, therefore, the finding of ld. CIT(A) sustaining estimated disallowance cannot be accepted. We find support from the following decisions: “1. In case of Mysore Fertiliser Co. v. CIT [1966] 59 ITR 268 (Mad.) it was held that the ITO shall make the assessment to the best of his Judgement; it means that he must make it according to the rules of reason and justice, not according to private opinion, but according to law and not humour, and the assessment is to be not arbitrary, vague and fanciful, but legal and regular. Page 14 of 114 I.T.A. No.:…

Deputy Commissioner of Income Tax, Central Circle-1, Guwahati vs. Abci Infrastructures Private Limited, Kolkata

In the result, the appeal of the assessee for Assessment Year

ITA 39/GTY/2022[2019-20]Status: HeardITAT Guwahati05 Apr 2023AY 2019-20

Bench: Sri Rajpal Yadav(Kz) & Dr. Manish Borad

Section 143(3)Section 250Section 44A

…nce of 0.64% of the sales revenue which is again on estimate basis and, therefore, the finding of ld. CIT(A) sustaining estimated disallowance cannot be accepted. We find support from the following decisions: “1. In case of Mysore Fertiliser Co. v. CIT [1966] 59 ITR 268 (Mad.) it was held that the ITO shall make the assessment to the best of his Judgement; it means that he must make it according to the rules of reason and justice, not according to private opinion, but according to law and not humour, and the assessment is to be not arbitrary, vague and fanciful, but legal and regular. Page 14 of 114 I.T.A. No.:…

Deputy Commissioner of Income Tax, Central Circle-1, Guwahati vs. Abci Infrastructures Private Limited, Kolkata

In the result, the appeal of the assessee for Assessment Year

ITA 38/GTY/2022[2018-19]Status: HeardITAT Guwahati05 Apr 2023AY 2018-19

Bench: Sri Rajpal Yadav(Kz) & Dr. Manish Borad

Section 143(3)Section 250Section 44A

…nce of 0.64% of the sales revenue which is again on estimate basis and, therefore, the finding of ld. CIT(A) sustaining estimated disallowance cannot be accepted. We find support from the following decisions: “1. In case of Mysore Fertiliser Co. v. CIT [1966] 59 ITR 268 (Mad.) it was held that the ITO shall make the assessment to the best of his Judgement; it means that he must make it according to the rules of reason and justice, not according to private opinion, but according to law and not humour, and the assessment is to be not arbitrary, vague and fanciful, but legal and regular. Page 14 of 114 I.T.A. No.:…

Deputy Commissioner of Income Tax, Central Circle-1, Guwahati vs. Abci Infrastructures Private Limited, Kolkata

In the result, the appeal of the assessee for Assessment Year

ITA 37/GTY/2022[2017-18]Status: HeardITAT Guwahati05 Apr 2023AY 2017-18

Bench: Sri Rajpal Yadav(Kz) & Dr. Manish Borad

Section 143(3)Section 250Section 44A

…nce of 0.64% of the sales revenue which is again on estimate basis and, therefore, the finding of ld. CIT(A) sustaining estimated disallowance cannot be accepted. We find support from the following decisions: “1. In case of Mysore Fertiliser Co. v. CIT [1966] 59 ITR 268 (Mad.) it was held that the ITO shall make the assessment to the best of his Judgement; it means that he must make it according to the rules of reason and justice, not according to private opinion, but according to law and not humour, and the assessment is to be not arbitrary, vague and fanciful, but legal and regular. Page 14 of 114 I.T.A. No.:…

DCIT, Central Circle-3, Jaipur vs. M/S Gunesh India Pvt.Ltd.Jaipur, Jaipur

In the result, the appeal of the assessee is partly allowed and the appeal of the revenue is also partly allowed

ITA 38/JPR/2021[ 2012-13]Status: DisposedITAT Jaipur14 Jul 2022
For Appellant: Shri Manish Agarwal (C.A.)For Respondent: Shri Sanjay Dhariwal (CIT) a
Section 143(1)Section 145(3)Section 147Section 148

…order of CIT(A). 336 ITR 400 CIT v. Aero Club (Delhi) Best judgment assessment – Assessment should be on rational basis – Profit margin disclosed by assessee cannot be rejected arbitrarily – Income-Tax Act, 1961. In case of Mysore Fertiliser Co. v. CIT [1966] 59 ITR 268 (Mad.) it was held that the ITO shall make the assessment to the best of his Judgement; it means that he must make it according to the rules of reason and justice, not according to private opinion, but according to law and not humour, and the assessment is to be not arbitrary, vague and fanciful, but legal and regular. It was held in case of CIT v…

M/S Ganesh (India)Pvt.Ltd, Jaipur vs. ACIT CC-3, Jaipur

In the result, the appeal of the assessee is partly allowed and the appeal of the revenue is also partly allowed

ITA 21/JPR/2021[2012-13]Status: DisposedITAT Jaipur14 Jul 2022AY 2012-13
For Appellant: Shri Manish Agarwal (C.A.)For Respondent: Shri Sanjay Dhariwal (CIT) a
Section 143(1)Section 145(3)Section 147Section 148

…order of CIT(A). 336 ITR 400 CIT v. Aero Club (Delhi) Best judgment assessment – Assessment should be on rational basis – Profit margin disclosed by assessee cannot be rejected arbitrarily – Income-Tax Act, 1961. In case of Mysore Fertiliser Co. v. CIT [1966] 59 ITR 268 (Mad.) it was held that the ITO shall make the assessment to the best of his Judgement; it means that he must make it according to the rules of reason and justice, not according to private opinion, but according to law and not humour, and the assessment is to be not arbitrary, vague and fanciful, but legal and regular. It was held in case of CIT v…

Shri Mahesh Chandra Chahar, Jhunjhunu vs. Assistant Commissioner of Income Tax, Jhunjhunu

In the result, both the appeals of the assessee are allowed in part, in terms indicated hereinabove

ITA 155/JPR/2018[2013-14]Status: DisposedITAT Jaipur14 Feb 2020AY 2013-14
For Appellant: Shri K.L. Moolchandani (CA)For Respondent: Shri Manmohan Kandpal (ACIT)
Section 143(3)

…rcumstances, no such addition was legally maintainable. For this purpose, reliance can 8 ITA 960/JP/2017 &155/JP/2018 Mahesh Chandra Chahar Vs. ACIT be placed on the decision of Hon’ble Madras High Court in the case of M/s Mysore Fertiliser Co. Vs CIT (1966) 59 ITR 268 and the decision of the ITAT, Jaipur Bench in the case of Raj Enterprises Vs ITO (1995) 51 TTJ 408 (JP). 8. Even the order of the ld. CIT(A) for the A.Y. 2009-10 clearly indicates that the addition was made by the A.O. on presumption without pointing out any defect. Even the rectification order passed by the ld CIT(A) U/s 154 of the Act reversing…

Shri Mahesh Chandra Chahar, Jhunjhunu vs. Assistant Commissioner of Income Tax, Jhunjhunu

In the result, both the appeals of the assessee are allowed in part, in terms indicated hereinabove

ITA 960/JPR/2017[2012-13]Status: DisposedITAT Jaipur14 Feb 2020AY 2012-13
For Appellant: Shri K.L. Moolchandani (CA)For Respondent: Shri Manmohan Kandpal (ACIT)
Section 143(3)

…rcumstances, no such addition was legally maintainable. For this purpose, reliance can 8 ITA 960/JP/2017 &155/JP/2018 Mahesh Chandra Chahar Vs. ACIT be placed on the decision of Hon’ble Madras High Court in the case of M/s Mysore Fertiliser Co. Vs CIT (1966) 59 ITR 268 and the decision of the ITAT, Jaipur Bench in the case of Raj Enterprises Vs ITO (1995) 51 TTJ 408 (JP). 8. Even the order of the ld. CIT(A) for the A.Y. 2009-10 clearly indicates that the addition was made by the A.O. on presumption without pointing out any defect. Even the rectification order passed by the ld CIT(A) U/s 154 of the Act reversing…

Jypore Manufaturing Jewellers Pvt. Ltd., Jaipur vs. JCIT(OSD), Jaipur

In the result appeals filed by assessee are allowed and that of revenue are dismissed

ITA 304/JPR/2014[2009-10]Status: DisposedITAT Jaipur23 Jan 2020AY 2009-10
For Appellant: Shri S.L. Poddar, AdvocateFor Respondent: Shri B.K. Gupta, CIT -DR
Section 153ASection 153C

…he state of trade in the locality or with any special circumstances of the assessee which warrant higher rate of profits. However, the ITO must disclose the basis and manner of computation and make his order a speaking order. IV. Mysore Fertilizer Co. V. CIT 59 ITR 268 (Mad.) The law says that the ITO shall make the assessment to the best of his judgment; it means that he must make it according to the rules of reason and justice and not according to private opinion, but according to law and humour, and that the assessment is to be not arbitrary, vague and fanciful but legal and regular. 2.14 In view of these sub…

D.C.I.T. Central Cricle, Raipur vs. M/S R.R.Energy Ltd., Raigarh(C.G)

In the result, cross objections filed by the assessee for assessment years 2006-07, 2007-08 and 2008-09 are allowed and cross objections filed for the assessment years 2009-10, 2010-11, 2011-12 and...

ITA 231/BIL/2014[2012-13]Status: DisposedITAT Raipur18 Jan 2018AY 2012-13
For Appellant: Shri G.S.Agrawal, ARFor Respondent: Shri P.K.Mishra, CITDR
Section 133(6)Section 68

…d that ITO must disclose the basis of computation of order and make his order a speaking order to make higher percentage. The "Estimations must not be arbitrary, vague and fanciful, but must be legal and regular. This was held in Masoor Fertilizers Co. vs CIT 59 ITR 268 Madras. The ITAT Banglore bench in CIT vs Gajanand Traders (2006) 104 TTJ (Bang) 1030 observed that A.O. having not made out a case that the accounts of the assessee are incorrect or incomplete or that the method of accounting followed by it is not an accepted method, book results could not be rejected and addition could not be made on the ground…

D.C.I.T. Central Cricle, Raipur vs. M/S R.R.Energy Ltd., Raigarh(C.G)

In the result, cross objections filed by the assessee for assessment years 2006-07, 2007-08 and 2008-09 are allowed and cross objections filed for the assessment years 2009-10, 2010-11, 2011-12 and...

ITA 230/BIL/2014[2011-12]Status: DisposedITAT Raipur18 Jan 2018AY 2011-12
For Appellant: Shri G.S.Agrawal, ARFor Respondent: Shri P.K.Mishra, CITDR
Section 133(6)Section 68

…d that ITO must disclose the basis of computation of order and make his order a speaking order to make higher percentage. The "Estimations must not be arbitrary, vague and fanciful, but must be legal and regular. This was held in Masoor Fertilizers Co. vs CIT 59 ITR 268 Madras. The ITAT Banglore bench in CIT vs Gajanand Traders (2006) 104 TTJ (Bang) 1030 observed that A.O. having not made out a case that the accounts of the assessee are incorrect or incomplete or that the method of accounting followed by it is not an accepted method, book results could not be rejected and addition could not be made on the ground…

Mysore Fertiliser Co. v. CIT (59 ITR 268) — Cited in 25 Judgments | BharatTax