State of Kerala v. C. Velukutty

60 ITR 239Supreme Court of India1966#1459 most cited

What is State of Kerala v. C. Velukutty authority for?

A best judgment assessment must be based on wisdom, truth, and legal principles, not arbitrary caprice. While it involves estimation and guesswork, this must have a reasonable nexus to available material and the case's circumstances.

78

judgments rely on this decision, according to BharatTax’s citation analysis of 366,470 Indian tax judgments — from 2015 to 2026.

Also referred to as

State of Kerala v C. Velukutty · 60 ITR 239 · best judgment assessment · estimation · arbitrary caprice · reasonable nexus · available material · settled principles of justice · guesswork

Sections most often in play

Section 250Section 271(1)(c)Section 271FSection 40A(3)Section 115BBESection 143(3)Section 144Section 194-IA

Issues it is cited on

section 69dsection 147(1)trade creditorsbogus share capitalsection 80a(5)section 153a(1)(b)best judgment assessmentsanctioning authoritysection 69bmistake apparent from recordrejection of books of accountsection 271f

Judgments citing State of Kerala v. C. Velukutty

M/S. Royal Jewellers, Jaipur vs. DCIT, Central Circle, Jaipur

The appeal of the assessee is partly allowed and that of the revenue stands dismissed

ITA 116/JPR/2020[2017-18]Status: DisposedITAT Jaipur07 Jun 2023AY 2017-18

Bench: SHRI SANDEEP GOSAIN (Judicial Member), SHRI RATHOD KAMLESH JAYANTBHAI (Accountant Member)

For Appellant: Sh. Manish Agarwal (CA)For Respondent: Sh. Sanjay Dhariwal (CIT) &
Section 132Section 143Section 143(3)Section 145(3)Section 68

…and all other matters which he thinks will assist him in arriving at a fair and proper estimate; and though there must necessarily be guesswork in the matter, it must be honest guesswork. In that sense, too, the assessment must be, to some extent, arbitrary. 60 ITR 239 (SC) State of Kerala V/s Velukutty: The limits of the power are implicit in the expression ‘best of his judgment’. Judgment is a faculty to decide matters with wisdom truly and legally. Judgement does not depend upon the arbitrary caprice of a judge, but on settled and invariable principles of justice. Though there is an element of guesswork in a…

M/S. Royal Jewellers, Jaipur vs. DCIT, Central Circle, Jaipur

In the result, appeal of the assessee in ITA No

ITA 115/JPR/2020[2016-17]Status: DisposedITAT Jaipur07 Jun 2023AY 2016-17

Bench: SHRI SANDEEP GOSAIN (Judicial Member), SHRI RATHOD KAMLESH JAYANTBHAI (Accountant Member)

For Appellant: Sh. Manish Agarwal (CA)For Respondent: Sh. Sanjay Dhariwal(CIT)&
Section 143Section 143(3)Section 145(3)

…and all other matters which he thinks will assist him in arriving at a fair and proper estimate; and though there must necessarily be guesswork in the matter, it must be honest guesswork. In that sense, too, the assessment must be, to some extent, arbitrary. 60 ITR 239 (SC) State of Kerala V/s Velukutty: The limits of the power are implicit in the expression ‘best of his judgment’. Judgment is a faculty to decide matters with wisdom truly and legally. Judgement does not depend upon the arbitrary caprice of a judge, but on settled and invariable principles of justice. Though there is an element of guesswork in a…

M/S. Royal Jewellers, Jaipur vs. DCIT, Central Circle, Jaipur

In the result, appeal of the assessee in ITA No

ITA 114/JPR/2020[2015-16]Status: DisposedITAT Jaipur07 Jun 2023AY 2015-16

Bench: SHRI SANDEEP GOSAIN (Judicial Member), SHRI RATHOD KAMLESH JAYANTBHAI (Accountant Member)

For Appellant: Sh. Manish Agarwal (CA)For Respondent: Sh. Sanjay Dhariwal(CIT)&
Section 143Section 143(3)Section 145(3)

…and all other matters which he thinks will assist him in arriving at a fair and proper estimate; and though there must necessarily be guesswork in the matter, it must be honest guesswork. In that sense, too, the assessment must be, to some extent, arbitrary. 60 ITR 239 (SC) State of Kerala V/s Velukutty: The limits of the power are implicit in the expression ‘best of his judgment’. Judgment is a faculty to decide matters with wisdom truly and legally. Judgement does not depend upon the arbitrary caprice of a judge, but on settled and invariable principles of justice. Though there is an element of guesswork in a…

M/S. Royal Jewellers, Jaipur vs. DCIT, Central Circle, Jaipur

In the result, appeal of the assessee in ITA No

ITA 113/JPR/2020[2014-15]Status: DisposedITAT Jaipur07 Jun 2023AY 2014-15

Bench: SHRI SANDEEP GOSAIN (Judicial Member), SHRI RATHOD KAMLESH JAYANTBHAI (Accountant Member)

For Appellant: Sh. Manish Agarwal (CA)For Respondent: Sh. Sanjay Dhariwal(CIT)&
Section 143Section 143(3)Section 145(3)

…and all other matters which he thinks will assist him in arriving at a fair and proper estimate; and though there must necessarily be guesswork in the matter, it must be honest guesswork. In that sense, too, the assessment must be, to some extent, arbitrary. 60 ITR 239 (SC) State of Kerala V/s Velukutty: The limits of the power are implicit in the expression ‘best of his judgment’. Judgment is a faculty to decide matters with wisdom truly and legally. Judgement does not depend upon the arbitrary caprice of a judge, but on settled and invariable principles of justice. Though there is an element of guesswork in a…

Shri Jitendra Kumar Agarwal, Jaipur vs. DCIT, Central Circle-2, Jaipur

In the result, appeal of the assessee is dismissed and that of the revenue is also stands dismissed

ITA 112/JPR/2020[2017-18]Status: DisposedITAT Jaipur07 Jun 2023AY 2017-18

Bench: SHRI SANDEEP GOSAIN (Judicial Member), SHRI RATHOD KAMLESH JAYANTBHAI (Accountant Member)

For Appellant: Sh. Manish Agarwal (CA)For Respondent: Sh. Sanjay Dhariwal (CIT) &
Section 132Section 143Section 143(3)Section 145(3)Section 68

…and all other matters which he thinks will assist him in arriving at a fair and proper estimate; and though there must necessarily be guesswork in the matter, it must be honest guesswork. In that sense, too, the assessment must be, to some extent, arbitrary. 60 ITR 239 (SC) State of Kerala V/s Velukutty: Shri Jitendra Kumar Agarwal vs. DCIT The limits of the power are implicit in the expression ‘best of his judgment’. Judgment is a faculty to decide matters with wisdom truly and legally. Judgement does not depend upon the arbitrary caprice of a judge, but on settled and invariable principles of justice. Though…

Deputy Commissioner of Income Tax Circle- 4(3)(2), Mumbai vs. Skm Fabrics ( Amana ) Ltd, Mumbai

In the result, appeal filed by the Revenue is dismissed

ITA 7027/MUM/2017[2012-13]Status: DisposedITAT Mumbai12 Aug 2022AY 2012-13

Bench: Shri Prashant Maharishi, Accountant, Member & Ms. Kavitha Rajagopaldcit, Circle-4(3)(2), Room No. 649, 6Th Floor, Aayakar Bhavan, M.K. Road, Mumbai-400020. ...... Appellant Vs. M/S Skm Fabrics (Amana) Ltd. 99, Niranjan, Ground Floor, Marine Lines, Mumbai-400002 Pan: Aafcs2660E ..... Respondent Appellant By : Sh. Hoshang B Irani (Dr) Respondent By : Sh. Yogesh Joijode Date Of Hearing : 24/05/2022 Date Of Pronouncement : 12/08/2022 Order Per Kavitha Rajagopal, J.M:

For Appellant: Sh. Hoshang B Irani (DR)For Respondent: Sh. Yogesh Joijode
Section 144Section 250Section 36(1)(iii)

…e of expenses of Rs. 2,14,19,271/- to Rs. 2,00,000/- as the AO has failed to consider the evidences furnished by the assessee. We also concur with the findings of Ld. CIT(A) in relying on the decision of Hon’ble Apex Court in State of Kerala Vs. C. Velukutty [60 ITR 239 (SC)] wherein it was held that even in the case of best judgment assessment, there should be reasonable nexus available to the material and circumstances of each case. Following the same, we hereby dismiss ground no.1 of appeal filed by the Revenue. 7. With regard to ground no.2 of the Revenue’s appeal in deleting the disallowance of interest of R…

I.T.O., Ward-1(4), Kolkata vs. M/S Garima Advisory Pvt. Ltd., Kolkata

In the result, the appeal of the Revenue is dismissed

ITA 386/KOL/2019[2013-14]Status: DisposedITAT Kolkata20 May 2022AY 2013-14

Bench: Shri Rajpal Yadav, Vice-(Kz) & Shri Girish Agrawal

Section 144Section 68

…on without any bias and on rational basis and that the said authority should not be vindictive or capricious and that basis adopted in estimating the turnover should have a reasonable nexus with the estimate made. 2. In State of Kerala vs. C. Velukuttv (1966) 60 ITR 239 (SC), it has been observed that limits of powers are implicit in the expression "best of his judgment". Judgment is a faculty to decide Matters with wisdom truly and legally. Judgment does not depend upon arbitrary caprice of a judge, but on settled and invariable principles of justice and though there is an element of guesswork in a "best judgmen…

The DCIT, Circle-4, Ahmedabad vs. Gopal Iron & Steel Co.(Guj.) Ltd., Ahmedabad

ITA 1901/AHD/2014[2009-10]Status: DisposedITAT Ahmedabad06 May 2022AY 2009-10
For Appellant: Shri Rameshkumar L. Sadhu, Sr. D.RFor Respondent: Shri Vijay Ranjan, A.R
Section 143(2)Section 144Section 250(6)Section 68Section 69

…ection, he should be tried and convicted if the offence is proved, in which case the law gives him a right to appeal, but to punish him indirectly by making a so-called best judgment assessment is wholly unwarranted. (2) State of Kerala vs. C.Velukuttv (1966) 60 ITR 239 (Supreme Court) Held: Though there is an element of guesswork in best judgment assessment, it should not be a wild one, but should have a reasonable nexus to the available material and the circumstances of the each case. Though the section provides for a summary method because of the default of the assessee, it does not enable the assessing author…

ACIT, Central Circle-2(1), Mumbai vs. M/S Luxora Realtors P. Ltd., Mumbai

In the result, appeal filed by the Revenue is dismissed

ITA 1096/MUM/2020[2013-14]Status: DisposedITAT Mumbai08 Feb 2022AY 2013-14

Bench: Shri S. Rifaur Rahman, Hon'Ble & Shri Amarjit Singh, Hon'Bleacit – Central Circle – 2(1) V. M/S. Luxora Realtors Pvt. Ltd., Room No. 804, 8Th Floor Soham House, Hari Om Nagar Aayakar Bhavan, M.K. Road Opp. Eastern Express Highway Mumbai - 400020 Mulund(E), Mumbai – 400081 Pan: Aabco3197J (Appellant) (Respondent) Assessee By : Shri Kishore Dewani Department By : Ms. Shailja Rai

For Appellant: Shri Kishore DewaniFor Respondent: Ms. Shailja Rai
Section 132(1)Section 143(2)Section 143(3)Section 153CSection 68

…he basis of a suspicion, it is trite law that the AO cannot brush aside the evidences submitted during assessment proceedings and make additions on mere whims and fancies. Even the Hon'ble Supreme Court-in the case of State of Kerala v. C Velukutty Co. [1966] 60 ITR 239 has held that the judgment is a faculty to decide the matters with wisdom truly and legally and not to depend on the arbitrary caprice of a Judge, but on settled and invariable principles of justice. 2.4.8 Further, Hon'ble Supreme Court in the case of MahabirPrasad SantoshKumar v. State of U.P. AIR 1970 SC 1302 has observed as under: ''Recording…

Nirav Rameshbhai Shah, Ahmedabad vs. The ITO, Ward-5(1)(4), Ahmedabad

The appeal of the assessee is allowed for statistical purposes

ITA 1122/AHD/2019[2011-12]Status: DisposedITAT Ahmedabad10 Jan 2022AY 2011-12
For Appellant: Shri Sagar Shah, A.RFor Respondent: Shri S.S. Shukla, Sr. D.R
Section 144Section 147Section 250(6)Section 68

…legally and it should not depend on the arbitrary caprice of an officer. In other words, though an element of guess work is involved in best judgment it should not be a wild one, as held by the Supreme Court in the case of State of Keralct v. Velukutti [1966] 60 ITR 239.” 3. The solitary issue in the present appeal relates to addition made to the income of the assessee on account of alleged unexplained cash deposited in the bank account of the assessee amounting to Rs. 10,15,000/-. 4. The facts of the case are that in re-assessment proceedings initiated on the assessee u/s 147 of the Act, notices issued to the…

M/S Shubham Cotton Mills Pvt. Ltd., Ellenabad vs. DCIT, Circle, Sirsa

In the result appeal of the assessee is allowed

ITA 1416/CHANDI/2019[2015-16]Status: DisposedITAT Chandigarh05 Oct 2021AY 2015-16
For Appellant: Shri Gautam Jain, AdvocateFor Respondent: Shri Ashok Kumar, Addl. CIT
Section 133ASection 143(1)Section 143(3)Section 145(3)Section 234Section 234B

…n 482 (Del) • Nathu Ram Prem Chand Vs. CIT 49 ITR 561 (All) • EMC Machine Works Vs. CIT 49 ITR 650 (All) • CIT Vs. Orissa Corporation (P) Ltd. 159 ITR 78 (SC) • State of Orissa Vs. Maharaja Shri B.P. Singh Deo 76 ITR 690(SC) • State of Kerala Vs. C. Velukutty 60 ITR 239 (SC) • Kachwala Germs Vs. CIT 288 ITR 10 (SC) 6.3 The assessee also submitted to the Ld. CIT(A) that the replies were furnished to the A.O. during the course of assessment proceedings. The said submission of the assessee has been incorporated by the Ld. CIT(A) at page no. 18 to 21 of the impugned order which is reproduced verbatim as under: i) R…

ACIT, Circle- 36(1), New Delhi vs. Bharat Bhushan Sawhney, Delhi

In the result, this appeal by Revenue is dismissed

ITA 3648/DEL/2018[2014-15]Status: DisposedITAT Delhi23 Aug 2021AY 2014-15

Bench: Shri Kul Bharat & Shri Anadee Nath Misshra

For Appellant: NoneFor Respondent: Shri N.K. Bansal, Sr. DR
Section 254(2)

…tables in cold storage and in this circumstances addition of GP was justified. Reliance is placed on the decision of the Hon’ble Supreme Court in the case of Brijbhushan Lal Praduman Kumar vs. CIT [1978] 115 ITR 524 and State of Kerala Vs. C. Velukutty [1996] 60 ITR 239. Further reliance is also placed on the decision of Delhi ITAT E-Bench in the case of ACIT Vs. Sunder Chemical and Agarbati Works Pvt. Ltd. [2015] 146 Taxman 11 (Delhi) and ITAT Amritsar Bench in the case of Jagan Nath Gurbachan Singh Vs. ITO [2001] 73 ITJ 878. 2. Notwithstanding, the tax effect is also above the monetary limit as prescribed by th…

DCIT, CC-6(2), Mumbai vs. M/S.Samira Residences Private Limited, Mumbai

Appeal is dismissed

ITA 1755/MUM/2018[2009-10]Status: DisposedITAT Mumbai29 Jun 2021AY 2009-10

Bench: Shri S. Rifaur Rahman & Shri Pavan Kumar Gadale

For Appellant: Shri Rishabh ShahFor Respondent: Shri Sumoguan Pal
Section 132(1)Section 133(6)Section 143(2)Section 153C

…re fact that the material placed by the assessee before the AO is unreliable does not empower the officer to make an arbitrary order. The power to make a best judgment assessment is not on arbitrary power. In the case of State of Kerala v. C. Velukutty [1966] 60 ITR 239 (SC) the Hon'ble Supreme Court held that, though there is an element of guesswork in a best judgment assessment, it should not be a wild one, but should have a reasonable nexus to the available material and the circumstances of each case. Though the section provides for a summary method because of the default of the assessee, it does not enable th…

Krishna Kumar Chaurasia, Allahabad vs. Income Tax Officer Ward-1(2), Allahabad

In the result, appeal of the assessee is allowed for statistical purposes

ITA 146/ALLD/2019[2007-08]Status: DisposedITAT Allahabad24 Feb 2021AY 2007-08

Bench: Shri.Vijay Pal Raoassessment Year: 2007-08 Krishna Kumar Chaurasia Vs. Income Tax Officer, 910A, Chandapur Ka Hata, Ward-1(2), Muthiganj, Allahabad Allahabad Tan/Pan:Adzpc 7982P (Appellant) (Respondent) Appellant By: Shri T.P. Shukla, Advocate Respondent By: Shri A.K. Singh, Cit (Dr) Date Of Hearing: 18.02.2021 Date Of Pronouncement: 24.02.2021 O R D E R

For Appellant: Shri T.P. Shukla, AdvocateFor Respondent: Shri A.K. Singh, CIT (DR)
Section 148Section 69ASection 80C

…ld. AR has submitted that at the most, the peak credit in the bank account can be considered as unexplained deposit. In support of his contention, he has relied upon the decision of the Hon'ble Supreme Court in the case of State of Kerala vs. Velukutty [1966] 60 ITR 239. Thus, the ld. AR has submitted that the Assessing Officer may be directed to consider the only peak credit in the bank account of the assessee. 3 Sri Krishna Kumar Chaurasia 5. On the other hand, ld. DR has submitted that the Assessing Officer passed the assessment order u/s 144 r.w.s. 147 when the assessee has not responded to the notices issu…

ITO, New Delhi vs. Sh. Sunil Nayyar, Delhi

In the result, the appeal of the revenue is dismissed and Cross

ITA 6168/DEL/2016[2012-13]Status: DisposedITAT Delhi24 Feb 2020AY 2012-13

Bench: Sh. Kuldip Singhdr. B. R. R. Kumarita No. 6168/Del/2016 : Asstt. Year : 2012-13 Income Tax Officer, Vs Sh. Sunil Nayyar, Ward-49(3), R/O 81-A, Vikrant Enclave, New Delhi Mayapuri, New Delhi-110064 (Appellant) (Respondent) Pan No. Abvpn3963B

For Appellant: Sh. Jagdish Ajmani, CAFor Respondent: Sh. Saras Kumar, Sr. DR
Section 68

…ar v CIT [1978] 115 ITR 524 the Apex Court held an estimate, must not be capricious but should have a reasonable nexus to the available material and the circumstances of the case. Same view has been taken in the case of State of Kerala vs. C. Velukutty [1996] 60 ITR 239 (SC). c. The principal has also been elucidated by the Apex court In the case of State of Kerala vs. C. Velukutty [1966] 60 ITR 239 (SC) wherein the following observations have been made. "The limits of the power are implicit in the expression 'best of his judgment’. Judgment is a faculty to decide matters with wisdom, truly and legally. Judgmen…

Shri Baboo Lal, Jaipur vs. ITO, Ward-6(1), Jaipur

In the result, ground no. 1 & 3 are dismissed, ground no

ITA 1370/JPR/2019[2009-10]Status: DisposedITAT Jaipur14 Feb 2020AY 2009-10
For Appellant: Shri G. M. Mehta (C.A.)For Respondent: Miss Chanchal Meena (JCIT)
Section 142(1)Section 143(2)Section 144Section 145(3)Section 154Section 32Section 44A

…rejected, the assessing officer must make an estimate, and to that extent he must make a guess; but the estimate must be related to some evidence or material and it must be something more than mere suspicion." Again in Stale of Kerala v. C. Velukutty [1966] 60 ITR 239 (SC), which was a case under the Travancore-Cochin General Sales Tax Act, Subba Rao J. (as he then was), speaking for this court, observed at page 244 of the report thus: "The limits of the power are implicit in the expression 'best of his judgment'. Judgment is a faculty to decide matters with wisdom truly and legally. Judgment does not depend up…

M/S Best Bakery & Ice Cream Parlour, Angamally vs. ACIT, Ernakulam

In the result, the appeals of the assessee in ITA Nos

ITA 513/COCH/2010[2007-08]Status: DisposedITAT Cochin16 Dec 2019AY 2007-08

Bench: Shri Chandra Poojari, Am &Shri George George K, Jm

For Respondent: Sri. Sudhanshu Shekhar Jha, CIT(DR)

…) relied on the following judicial pronouncements: 1. State of Orissa v. Maharaja Shri B.P. Singh Deo (1970) 76 ITR 690(SC) 2.RamdasJuganiv.CIT (2006) 282 ITR 356 (MP) 3.CTT v. LaxminarainBadridas (1937) 5 ITR 170 (PC) 4.State of Kerala v. C. Velukutty (1966) 60 ITR 239(SC) M/s.Best Bakery & Ice Cream Parlour. ITA Nos. 302 to 308/Coch/2010 & 269 to 275/coch/2010 M/s. Matha Enterprises. 9.6 According to the CIT(A), a fair and judicious attempt needed to be made in such set of circumstances to arrive at real income earned by the assessee out of such unaccounted business activity as held by various courts from time…

M/S Best Bakery & Ice Cream Parlour, Angamally vs. ACIT, Ernakulam

In the result, the appeals of the assessee in ITA Nos

ITA 509/COCH/2010[2003-04]Status: DisposedITAT Cochin16 Dec 2019AY 2003-04

Bench: Shri Chandra Poojari, Am &Shri George George K, Jm

For Respondent: Sri. Sudhanshu Shekhar Jha, CIT(DR)

…) relied on the following judicial pronouncements: 1. State of Orissa v. Maharaja Shri B.P. Singh Deo (1970) 76 ITR 690(SC) 2.RamdasJuganiv.CIT (2006) 282 ITR 356 (MP) 3.CTT v. LaxminarainBadridas (1937) 5 ITR 170 (PC) 4.State of Kerala v. C. Velukutty (1966) 60 ITR 239(SC) M/s.Best Bakery & Ice Cream Parlour. ITA Nos. 302 to 308/Coch/2010 & 269 to 275/coch/2010 M/s. Matha Enterprises. 9.6 According to the CIT(A), a fair and judicious attempt needed to be made in such set of circumstances to arrive at real income earned by the assessee out of such unaccounted business activity as held by various courts from time…

M/S Best Bakery & Ice Cream Parlour, Angamally vs. ACIT, Ernakulam

In the result, the appeals of the assessee in ITA Nos

ITA 507/COCH/2010[2001-02]Status: DisposedITAT Cochin16 Dec 2019AY 2001-02

Bench: Shri Chandra Poojari, Am &Shri George George K, Jm

For Respondent: Sri. Sudhanshu Shekhar Jha, CIT(DR)

…) relied on the following judicial pronouncements: 1. State of Orissa v. Maharaja Shri B.P. Singh Deo (1970) 76 ITR 690(SC) 2.RamdasJuganiv.CIT (2006) 282 ITR 356 (MP) 3.CTT v. LaxminarainBadridas (1937) 5 ITR 170 (PC) 4.State of Kerala v. C. Velukutty (1966) 60 ITR 239(SC) M/s.Best Bakery & Ice Cream Parlour. ITA Nos. 302 to 308/Coch/2010 & 269 to 275/coch/2010 M/s. Matha Enterprises. 9.6 According to the CIT(A), a fair and judicious attempt needed to be made in such set of circumstances to arrive at real income earned by the assessee out of such unaccounted business activity as held by various courts from time…

M/S. Matha Enterprises, Angamally vs. ACIT, Ernakulam

In the result, the appeals of the assessee in ITA Nos

ITA 308/COCH/2010[2007-08]Status: DisposedITAT Cochin16 Dec 2019AY 2007-08

Bench: Shri Chandra Poojari, Am &Shri George George K, Jm

For Respondent: Sri. Sudhanshu Shekhar Jha, CIT(DR)

…) relied on the following judicial pronouncements: 1. State of Orissa v. Maharaja Shri B.P. Singh Deo (1970) 76 ITR 690(SC) 2.RamdasJuganiv.CIT (2006) 282 ITR 356 (MP) 3.CTT v. LaxminarainBadridas (1937) 5 ITR 170 (PC) 4.State of Kerala v. C. Velukutty (1966) 60 ITR 239(SC) M/s.Best Bakery & Ice Cream Parlour. ITA Nos. 302 to 308/Coch/2010 & 269 to 275/coch/2010 M/s. Matha Enterprises. 9.6 According to the CIT(A), a fair and judicious attempt needed to be made in such set of circumstances to arrive at real income earned by the assessee out of such unaccounted business activity as held by various courts from time…