“best judgment assessment”

Assessment ProceduresSection 144Section 1441,400 judgments

The decision most relied on for best judgment assessment is Kachwala Gems v. JCIT (288 ITR 10), cited in 332 judgments on BharatTax.

Leading authorities on best judgment assessment

Kachwala Gems v. JCIT

288 ITR 10 · 2007 · Supreme Court

332

citing judgments

In a best judgment assessment, some guesswork is inherent, but the estimate must be fair and not arbitrary. Books of account can be rejected under Section 145(3) if the assessee fails to substantiate entries or prove the genuineness of transactions, leading to estimation of income.

Commissioner of Sales Tax v. H.M. Esufali H.M. Abdulali

90 ITR 271 · 1973 · Supreme Court

232

citing judgments

The Supreme Court established principles for best judgment assessments, stating that some guesswork is inevitable but the assessment must be bona fide, rational, and free from bias or capriciousness. An appellate authority cannot substitute its judgment for that of the Assessing Officer unless the AO's assessment is shown to be biased, irrational, vindictive, or capricious, especially when the assessee fails to provide proper accounts or counter-evidence.

CIT v. Gurubachhan Singh J. Juneja

302 ITR 63 · 2008 · High Court

147

citing judgments

When unaccounted receipts or suppressed sales are detected and books of account are rejected under Section 145(3), additions to income must be restricted to the profit element embedded in such transactions, not the entire transaction value. This profit element is to be estimated by considering the assessee's regular profit ratio as per books of account.

Man Mohan Sadani v. CIT

304 ITR 52 · 2008 · High Court

132

citing judgments

When assessing income from undisclosed or unrecorded sales, the entire sale proceeds cannot be added to the assessee's income; instead, only the net profit embedded in such unaccounted sales, determined by applying the assessee's net profit rate, should be taxed.

Brij Bhushan Lal Paraduman Kumar v. CIT

115 ITR 524 · 1978 · Supreme Court

113

citing judgments

The Supreme Court holds that an Assessing Officer, when making a best judgment assessment or estimating income, must act fairly, honestly, and rationally, basing the estimation on available material and avoiding arbitrary or capricious decisions. Adherence to natural justice principles is crucial during assessment proceedings.

CIT v. Laxminarain Badridas

5 ITR 170 · 1937 · Supreme Court

citing judgments

An income tax officer making a best judgment assessment must act honestly, not dishonestly, vindictively, or capriciously. They must make a fair estimate of the assessment, considering local knowledge, repute, and previous assessments.

State of Kerala v. C. Velukutty

60 ITR 239 · 1966 · Supreme Court

citing judgments

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.

Shankar Khandasari Sugar Mills v. CIT

193 ITR 669 · 1992 · High Court

citing judgments

Best judgment assessments under Section 144 must be a fair and rational estimation of income by the Assessing Officer, not capricious or arbitrary. Appellate authorities should accept clarificatory evidence to test the fairness of such assessments, even if produced for the first time.

Judgments citing best judgment assessment

Ajay Kumar Agarwal, Hathras vs. Assessment Unit, Hathras

In the result, appeal is allowed for statistical purposes

ITA 230/AGR/2025[2018-19]Status: DisposedITAT Agra26 Sept 2025AY 2018-19

Bench: : Shri S. Rifaur Rahman & Shri Sunil Kumar Singhassessment Year: 2018-19

Section 144Section 250

bank account, which remained unexplained. Statutory notices were issued and served upon the assessee, which remained un-responded. Learned Assessing Officer carried out best judgment assessment u/s. 144 of the Act and assessed total income of Rs.3,16,72,471/-. 3. Aggrieved assessee preferred an appeal before ... this effect. 7. Learned DR has supported the impugned order. 8. It transpires from the perusal of record that Ld. Assessing Officer passed best judgment assessment u/s. 144 of the Act due to no submissions on behalf of the assessee. Similarly, first appellate authority was also compelled to pass impugned

Sunilkumar Ichhubhai Patel, Surat vs. ITO, Ward-2(2)(4), Surat

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

ITA 52/SRT/2025[2017-18]Status: DisposedITAT Surat26 Sept 2025AY 2017-18

Bench: Ms. Suchitrta Raghunath Kamble & Shri Bijayananda Prusethआयकर अपील सं./Ita No.52/Srt/2025

Section 144Section 250Section 69A

IN THE INCOME-TAX APPELLATE TRIBUNAL, SURAT BENCH, SURAT BEFORE MS. SUCHITRTA RAGHUNATH KAMBLE, JUDICIAL MEMBER & SHRI BIJAYANANDA PRUSETH, ACCOUNTANT

Milanben Narendra Choksi, Surat vs. ITO, Ward 1(2)(3), Surat

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

ITA 404/SRT/2025[2017-18]Status: DisposedITAT Surat26 Sept 2025AY 2017-18

Bench: Ms. Suchitrta Raghunath Kamble & Shri Bijayananda Prusethआयकर अपील सं./Ita No.404/Srt/2025 Assessment Year: 2017-18 (Hybrid Hearing) Milanben Narendra Choksi Income Tax Officer, Ward-1(2)(3), बनाम/ Mu, Wd.No.3/628, Navapura Surat, Room No.118, First Floor, Vs. Karva Road, Surat-395 003 Aaykar Bhawan, Near Majura Gate, Opp. Civil Hospital, Surat- 395001 "थायीलेखासं./जीआइआरसं./Pan/Gir No: Aappc 8557 R (अपीलाथ"/Appellant) (""थ" /Respondent) िनधा"रती की ओर से /Appellant By Shri Sapnesh R. Sheth, Advocate राज" की ओर से /Respondent By Shri Ajay Uke, Sr-Dr सुनवाई की तारीख/Date Of Hearing 19/08/2025 उद्घोषणा की तारीख/Date Of Pronouncement 26/09/2025

Section 142(1)Section 143(2)Section 144Section 145Section 250

neither replied nor submitted any details in compliance of aforesaid show cause notice. In absence of compliance, the AO proceed for completing the ‘best judgment assessment’ u/s 144 of the Act on the basis of material available on records. On verification of the details and material available on record ... parte primarily on the basis of documents/details available ITA No.404/Srt/2025 A.Y 17-18 Milanben N Choksi on record. The grounds relating to best judgment assessment u/s 144 has also been dismissed because assessee remained unresponsive during assessment proceedings. As regards the addition of Rs.31,75,017/- by estimating

S.G. Srinivasan, Vellore vs. ITO, Ward-1, Vellore

In the result, the grounds of

ITA 1926/CHNY/2025[2017-18]Status: DisposedITAT Chennai26 Sept 2025AY 2017-18

Bench: Shri Ss Viswanethra Ravi & Shri Ratnesh Nandan Sahays.G. Srinivasan, I.T.O., No. 15, Venkatramana Vs. Ward-1, Vellore Bhagavathar Street, Walajapet, No. 2, Barracks Cross Street, Vellore-632513. Officers Line, Vellore, Tamil Pan No. Belps 3581 L Nadu-632001. Appellant/ Assessee Respondent/ Revenue

treated as invalid return as per the provisions of the Act. The Assessing Officer, thereafter passed assessment order on the basis of best judgment assessment and assessed the income at Rs. 2,49,744/- being 8% of the total turnover shown by the assessee. The Assessing Officer further added

Ramesh Goswami, Singrauli vs. Income Tax Officer, Singrauli

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

ITA 58/JAB/2025[2017-18]Status: DisposedITAT Jabalpur25 Sept 2025AY 2017-18

Bench: SH. KUL BHARAT, VICE PRESIDENT AND SH. NIKHIL CHOUDHARY (Accountant Member)

For Appellant: Sh. Neeraj Agrawal, C.AFor Respondent: Sh. Shravan Kumar Meena, CIT DR

Section 115BSection 143Section 144Section 271ASection 69A

option left, but to resort to the provisions of section 144 of the Income Tax Act, 1961 and make a best judgment assessment on the basis of material on record. Since the assessee had not furnished any information, the ld. AO held that the cash deposits in the bank account

Rama Agrawal, Durg vs. Income Tax Officer-2(1), Bhilai, Durg

In the result, appeal of the assessee is allowed

ITA 490/RPR/2025[2015-16]Status: DisposedITAT Raipur25 Sept 2025AY 2015-16

Bench: Shri Partha Sarathi Chaudhuryआयकर अपील सं./Ita No.490/Rpr/2025 "नधा"रण वष" /Assessment Year : 2015-16 Rama Agrawal 33A, I. E. Bhilai, S.O Industrial Estate, Durg-490 026 (C.G.) Pan: Acgpa8359N

For Appellant: Shri Abhishek Mahawar, CAFor Respondent: Dr. Priyanka Patel, Sr. DR

Section 142(1)Section 143(2)Section 143(3)Section 144Section 147Section 148

notice u/s. 143(2) of the Act those are submitted by the assessee. Similarly when assessment is completed u/s. 144, it is the best judgment assessment completed by the A.O and such best judgment is only demonstrated through issuance of notice u/s. 143(2) by the Revenue asking the assessee ... which I have examined in foregoing paras and all such notices are silent regarding the said fact. The best judgment assessment is therefore questionable and vitiated wherein the mandatory statutory notice has not been issued to the assessee and therefore proper opportunity was not provided to the assessee in terms

Income Tax Officer 1(1)(1), Kanpur vs. Ajay Kumar Gupta, Kanpur

In the result, ITA No.427/LKW/2024 is allowed for statistical purposes while CO No

ITA 427/LKW/2024[2017-18]Status: DisposedITAT Lucknow25 Sept 2025AY 2017-18

Bench: Sh. Subhash Malguria & Sh. Nikhil Choudharya.Y. 2017-18 Income Tax Officer-1(1)(1), Vs. Ajay Kumar Gupta, Kanpur, U.P. 51/92C, Naya Ganj, Kanpur Pan: Abkpg5651J (Appellant) (Respondent) C.O. No.26/Lkw/2024 In A.Y. 2017-18 Ajay Kumar Gupta, Vs. Income Tax Officer-1(1)(1), 51/92C, Naya Ganj, Kanpur Kanpur, U.P. Pan: Abkpg5651J (Appellant) (Respondent) Assessee By: Sh. Rakesh Garg, Adv Revenue By: Sh. R.R.N. Shukla, Addl Cit Dr Date Of Hearing: 04.09.2025 Date Of Pronouncement: 25.09.2025 O R D E R Per Nikhil Choudhary, A.M.: [ This Appeal & Cross Objection Have Been Filed By The Revenue & The Assessee Respectively, Against The Orders Of The Ld. Cit, Nfac Passed Under Section 250 Of The Income Tax Act, 1961 On 10.05.2024, Wherein The Ld. Cit(A) Has Allowed The Appeal Of The Assessee Against The Orders Of The Ao Under Section 147 R.W.S. 144 Passed On 30.03.2022. The Grounds Of Appeal Are As Under:- “1. Ld. Commissioner Of Income Tax (Appeal) Has Erred In Law & On Facts In Accepting The Contention Of The Assessee That The Proceedings Made U/S 147 Is Not In Accordance With Law. 2. Ld. Commissioner Of Income Tax (Appeal) Has Erred In Law & On Facts In Deleting The Addition Made By The Ao On Account Of Unexplained Money U/S 69A Of Income Tax Act, 1961 Deposited During The F.Y.2016-17 Without Appreciating That The Ao Has 1 Co No.26/Lkw/2024 Ajay Kumar Gupta A.Y. 2017-18

For Appellant: Sh. Rakesh Garg, AdvFor Respondent: Sh. R.R.N. Shukla, Addl CIT DR

Section 142(1)Section 144Section 144BSection 147Section 148Section 250Section 69A

income. He also did not make compliance to the notices under section 142(1) seeking details from him. A Show cause notice for best judgment assessment under section 144 was also issued and served through the verification unit. However, the assessee did not make any response to this notice also

Dy. Commissioner of Income Tax (Exemption), Lucknow vs. M/S Ayodhya Faizabad Developement Authority, Faizabad

In the result, appeal in ITA No

ITA 525/LKW/2017[2011-12]Status: DisposedITAT Lucknow25 Sept 2025AY 2011-12

Bench: SH. KUL BHARAT, VICE PRESIDENT AND SH. NIKHIL CHOUDHARY (Accountant Member)

For Appellant: Ms. Shweta Mittal, C.AFor Respondent: Sh. R.K. Agarwal, CIT DR

Section 11Section 143(2)Section 147Section 148Section 276CSection 292B

failure to comply, the Assessing Officer also issued notice for levy of penalty under section 271(1)(b). Subsequently, a notice for best judgment assessment under section 144 was issued on 30.11.2016. In response to this notice, the representative of the assessee appeared on 5.12.2016 and filed a letter stating

Govindegowda Ramegowda, Mandya vs. Pr. CIT, Bengaluru-3, Bengaluru

In the result, all the three appeals filed by the assessees are allowed

ITA 925/BANG/2025[2020-21]Status: DisposedITAT Bangalore25 Sept 2025AY 2020-21

Bench: Shri Waseem Ahmed & Shri Soundararajan K.

For Appellant: Shri Tharun Kothari, CAFor Respondent: Shri Shivanand Kalakeri, CIT-DR

Section 143(2)Section 143(3)Section 194CSection 263

regular books Page 6 of 10 ITA Nos. 923 to 925/Bang/2025 3) AO should have rejected the method of estimation and make a best judgment assessment. 4) AO should have atleast estimated the correct income at 8%. 8. Therefore the Ld.PCIT had arrived a conclusion that the order

Gowdahally Lingegowda Lakshmegowda, Mandya vs. Pr. CIT, Bengaluru-3, Bengaluru

In the result, all the three appeals filed by the assessees are allowed

ITA 924/BANG/2025[2020-21]Status: DisposedITAT Bangalore25 Sept 2025AY 2020-21

Bench: Shri Waseem Ahmed & Shri Soundararajan K.

For Appellant: Shri Tharun Kothari, CAFor Respondent: Shri Shivanand Kalakeri, CIT-DR

Section 143(2)Section 143(3)Section 194CSection 263

Kadalur Ramakrishna Mahesha, Mandya vs. Pr. CIT, Bengaluru-3, Bengaluru

In the result, all the three appeals filed by the assessees are allowed

ITA 923/BANG/2025[2020-21]Status: DisposedITAT Bangalore25 Sept 2025AY 2020-21

Bench: Shri Waseem Ahmed & Shri Soundararajan K.

For Appellant: Shri Tharun Kothari, CAFor Respondent: Shri Shivanand Kalakeri, CIT-DR

Section 143(2)Section 143(3)Section 194CSection 263

Income Tax Officer, W-2(1), Gvmc (Part), Visakhapatnam vs. Sathish Kumar Attada, Gvmc (Part), Visakhapatnam

In the result, appeal of the revenue is dismissed

ITA 422/VIZ/2024[2018-19]Status: DisposedITAT Visakhapatnam24 Sept 2025AY 2018-19

Bench: Shri Ravish Sood, Hon’Ble & Shri S Balakrishnan, Hon’Bleआयकर अपीलसं./I.T.A.No.422/Viz/2024 (निर्धारण वर्ा/ Assessment Year:2018-19) Vs. Income Tax Officer – Ward – 2(1) Sathish Kumar Attada Infinity Tower, 2Nd Floor Flat No. 506, Tsr Nri County 2 Range-2, Sankaramatam Road Srinivasanagar, Yendada-530020 Santhipuram, Visakhapatnam – 530016 Andhra Pradesh Andhra Pradesh [Pan:Akapa1392B] करदाता का प्रतततितित्व/ Assessee Represented By : Shri I. Kama Sastry, Ca : Shri Mn Murthy Naik, Cit(Dr) राजस्व का प्रतततितित्व/ Department Represented By सुिवाई समाप्त होिे की ततति/ Date Of Conclusion Of Hearing : 19.08.2025 घोर्णध की तधरीख/Date Of Pronouncement : 24.09.2025

Section 142(1)Section 143(1)Section 143(2)Section 144Section 69

submitted any Remand Report till 10.04.2024. The Ld. AO vide letter dated 10.04.2024 only reiterated the facts which lead to passing of the best judgment assessment under section 144 of the Act. Therefore, the Ld. CIT(A) concluded that Ld. AO has nothing to say in his Remand Report with ... notice by the Ld. CIT(A) vide his letter dated 10.04.2024 only reiterated the facts which led him to pass the best judgment assessment. In this situation, the Ld. CIT(A) is right in concluding that the Ld.AO does not have anything to say in his Remand Report with regard

Rajamuri Shivaraj, Mahabubnagar vs. ITO., Ward-1, Mahabubnagar

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

ITA 897/HYD/2025[2014-15]Status: DisposedITAT Hyderabad24 Sept 2025AY 2014-15

Bench: Shri Manjunatha G & Shri Ravish Sood

For Appellant: Sri Mohd. Afzal, AdvocateFor Respondent: Sri Madan Mohan Meena,Sr. AR

Section 142(1)Section 144Section 147Section 148Section 250Section 69A

determined the total income of the assessee at Rs.65,55,000/- by making addition u/sec.69A of the Act as unexplained money vide his best Judgment assessment order dated 14.03.2022. 3 ITA.No.897/Hyd./2025 3. Aggrieved by the assessment order, the assessee preferred appeal before the learned CIT(A). The learned ... Officer based on the material available on record, made impugned addition Rs.65,55,000/- as unexplained money u/sec.69A of the Act and passed best Judgment assessment order u/sec.144 of the Act. During the course of appellate proceedings before the learned CIT(A), although, the learned CIT(A) has issued notices

Ateequr Rahman, Nizamabad vs. ITO., Ward-1, Sangareddy

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

ITA 896/HYD/2025[2017-18]Status: DisposedITAT Hyderabad24 Sept 2025AY 2017-18

Bench: Shri Manjunatha G & Shri Ravish Sood

For Appellant: Sri Tejprakash Toshniwal, AdvocateFor Respondent: Sri Madan Mohan Meena, Sr. AR

Section 133(6)Section 142(1)Section 144Section 250Section 69A

cash deposit during the demonetization period amounting to Rs.16,55,000/- u/sec.69A r.w.s.115BBE of the Income Tax Act, 1961 as unexplained money, vide best Judgment assessment order dated 28.09.2019 passed u/sec.144 of the Income Tax Act, 1961. 3. Aggrieved by the assessment order, the assessee preferred appeal before the learned

Late Sh. Lakha Singh Through Legal Heir Hira Singh Dera Pyara Singh Barna Thanesar Kurukshetra, Kurukshetra vs. The Income Tax Officer Ward-1 Aaykar Bhawan, Near Community Hall Sector-5, Kurukshetra Haryana, Kurukshetra

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

ITA 1151/CHANDI/2024[2012-2013]Status: DisposedITAT Chandigarh22 Sept 2025AY 2012-2013

Bench: SHRI. LALIET KUMAR (Judicial Member), SHRI. MANOJ KUMAR AGGARWAL (Accountant Member)

For Appellant: Shri Sudhir Sehgal, AdvocateFor Respondent: Shri Vivek Vardhan, Addl. CIT, Sr. DR

Section 142(1)Section 144Section 148

appeal, legal and factual grounds were raised, including challenge to the validity of reassessment for non-service of notice u/s 148, validity of best judgment assessment, denial of natural justice, and challenge to additions on merits. The legal heir also sought to file additional evidence under Rule 46A, citing

Awez Wahab Shaikh, Sillod vs. The ITO, Ward 1(1), Aurangabad

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

ITA 1131/PUN/2025[2017-2018]Status: DisposedITAT Pune22 Sept 2025AY 2017-2018

Bench: Dr.Manish Borad

For Appellant: NoneFor Respondent: Shri Manoj Tripathi

Section 139Section 142(1)Section 144Section 250Section 69A

claimed that the alleged deposits in the bank are from sale proceeds of the Mobiles and accessories. Still ld. AO proceeded to pass Best Judgment Assessment u/s.144 of the Act making addition of Rs.13,46,800/- u/s.69A of the Act assessing the income at Rs.18,66,520/-. 5. I further ... submitted with the return of income filed in reply to notice u/s.142(1) of the Act. However, since ld,AO has passed the Best Judgment assessment for non compliance on the part of the assessee which has arisen due to non communication of information to the assessee, I deem

Shankar Saybu Rakhewar, Pune vs. ITO Ward -2, Nanded

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

ITA 1031/PUN/2025[2017-18]Status: DisposedITAT Pune22 Sept 2025AY 2017-18

Bench: Dr.Manish Borad

For Appellant: NoneFor Respondent: Shri Manoj Tripathi

Section 144Section 250Section 69A

during the demonetization period issued statutory notices for carrying out the assessment proceedings. However, assessee failed to complied and ld. AO completed the Best Judgment Assessment u/s.144 of the Act making various additions amounting to Rs.19,50,314/-. Aggrieved assessee preferred appeal before ld.CIT(A) and in the statement

Suhir Finance and Chits Pvt. Ltd., New Delhi vs. ITO Ward-24(2), New Delhi

Accordingly, the appeal filed by the assessee is allowed

ITA 8767/DEL/2019[2012-13]Status: DisposedITAT Delhi19 Sept 2025AY 2012-13

Bench: the Assessing Officer but the Assessing Officer has not disposed of the above objections. Further he submitted that assessee has raised submissions before the ld. CIT (A) and ld. CIT (A) has not appreciated the submissions of the assessee and dismissed the grounds raised by the assessee.

For Appellant: Shri Vikash Jain, AdvocateFor Respondent: Shri Sahil Kumar Bansal, Sr. DR

Section 142(1)Section 143(1)Section 143(2)Section 143(3)Section 292B

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH ‘F’: NEW DELHI BEFORE SHRI MAHAVIR SINGH, VICE PRESDIENT and SHRI S

ITO, Ward- 24(3), New Delhi vs. Suhir Finance and Chits Pvt. Ltd., New Delhi

Accordingly, the appeal filed by the assessee is allowed

ITA 8656/DEL/2019[2012-13]Status: DisposedITAT Delhi19 Sept 2025AY 2012-13

Bench: SHRI MAHAVIR SINGH, VICE PRESDIENT, SHRI S. RIFAUR RAHMAN (Accountant Member)

For Appellant: Shri Vikash Jain, AdvocateFor Respondent: Shri Sahil Kumar Bansal, Sr. DR

Section 142(1)Section 143(1)Section 143(2)Section 143(3)Section 292B

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH ‘F’: NEW DELHI BEFORE SHRI MAHAVIR SINGH, VICE PRESDIENT and SHRI S

Mrs. Suganthi, Trichy vs. ITO, Ward-2(1), Trichy

In the result, the appeal filed by the assessee is allowed for statistical purposes

ITA 2026/CHNY/2025[2019-20]Status: DisposedITAT Chennai17 Sept 2025AY 2019-20

Bench: Shri George George Kand Shri S.R. Raghunathaआयकर अपील सं./Ita No.: 2026/Chny/2025 िनधा"रण वष"/Assessment Year:2019-20 Smt. Suganthi, The Income Tax Officer, 1-128 Nadu Theru, Vs. Ward 2(1), Srinivasa Nallur Trichy. Maganthiramangalam, Trichy – 621 209. Pan: Jonps 9267D (अपीलाथ"/Appellant) (""यथ"/Respondent) अपीलाथ" क" ओर से/Appellant By : Shri R. Prasanna Venkatesan, Ca ""यथ" क" ओर से/Respondent By : Ms. Gouthami Manivasagam, Jcit सुनवाई क" तारीख/Date Of Hearing : 17.09.2025 घोषणा क" तारीख/Date Of Pronouncement : 17.09.2025

For Appellant: Shri R. Prasanna Venkatesan, CAFor Respondent: Ms. Gouthami Manivasagam, JCIT

Section 147Section 250

before him and there is no reasonable cause for condoning the same. Further, we also notice that the assessment has been completed on best judgment assessment u/s. 147 r.w.s. 144 r.w.s.144B of the Act. 3. On perusing the order of FAA, we noted that the assessee has filed the reason