“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

Shivayya Tammayya Swami, Sangli vs. ITO Ward 2 Sangli, Sangli

In the result, all the appeals of the assessee bearing ITA

ITA 711/PUN/2025[2013-14]Status: DisposedITAT Pune31 Jul 2025AY 2013-14

Bench: Dr.Manish Borad & Shri Vinay Bhamore

For Appellant: Smt. Deepa KhareFor Respondent: Shri Akhilesh Srivastva

Section 147Section 250

Coop. Credit Society Ltd., re-assessment proceedings u/s.147 were initiated followed by validly serving statutory notices. However, assessee failed to appear resulting into best judgment assessments by the ld. Assessing Officer making additions in the hands of assessee. Aggrieved with the additions assessee filed appeals before ld.CIT(A) but again ... dismissal of the appeals. 6. However, considering the prayer made by ld. Counsel for the assessee and observing that the assessment orders are best judgment assessments passed u/s.147 r.w.s.144 of the Act, we in the larger interest of justice and being fair to both the parties deem it to restore

Amit Ambadas Mete, Aurangabad vs. ITO, Ward 1 (5) Aurangabad, Auranagabad

In the result, appeal of the assessee is partly allowed

ITA 1524/PUN/2025[2010-2011]Status: DisposedITAT Pune31 Jul 2025AY 2010-2011

Bench: Dr.Manish Borad

For Appellant: Shri Ramesh N ThetheFor Respondent: Shri Deepak Kumar Kedia

Section 142(1)Section 144Section 148Section 250Section 68

statutory notice u/s.142(1) of the Act issued but there was no compliance from the side of assessee. Ld. AO finally framed the best judgment assessment u/s.144 of the Act and assessed income at Rs.15,67,340/-. Ld. Counsel for the assessee with the help of bank statement and details

Binod Kumar Burnwal, Burdwan vs. ITO, Ward 2(1), Durgapur

In the result, the appeal of the assessee is partly allowed

ITA 1154/KOL/2025[2010-2011]Status: DisposedITAT Kolkata31 Jul 2025AY 2010-2011

Bench: Shri Sonjoy Sarma & Shri Rakesh Mishrai.T.A. No.1154/Kol/2025 Assessment Year: 2010-11 Binod Kumar Burnwal…….……...……..…………………....Appellant C/O Ghanashyam Burnwal, Banagram, Nutandanga, Gogla, Burdwan – 713383. [Pan: Aizpb0692A] Vs. Ito, Ward-2(1), Durgapur…………………..………………….…..... Respondent Appearances By: Shri Manoj Tiwari, Advocate, Appeared On Behalf Of The Appellant. Shri Kallol Mistry, Jcit, Sr. Dr, Appeared On Behalf Of The Respondent. Date Of Concluding The Hearing : July 29, 2025 Date Of Pronouncing The Order : July 31, 2025 आदेश / Order Per Sonjoy Sarma: This Appeal By The Assessee Is Directed Against The Order Dated 18.03.2025 Passed By The Nfac [In Short Cit(A)] Under Section 250 Of The Income-Tax Act, 1961. 2. Brief Facts Of The Case Are That The Assessee Filed Its Return Of Income Declaring Total Income Of ₹2,89,094, Which Was Processed Under Section 143(1) Of The Income-Tax Act, 1961. Subsequently, The Case Was Selected For Scrutiny Under Cass With Prior Approval Of The Competent Authority. Statutory Notices Under Sections 143(2) & 142(1) Were Issued, But There Was No Compliance From The Assessee Or His Authorised Representative. In The Absence Of Proper Books Of Account Or Supporting Documents, The Assessing Officer (Ao) Collected Copies Of Audited Financial Statements From The Assessee’S Chartered Accountant. It Was Observed That During The Year Under Consideration, The Assessee

Section 133(6)Section 143(1)Section 144Section 250

genuineness of the transactions in full. Given the non-compliance and incomplete verification, the AO proceeded to frame the assessment under Section 144 (best judgment assessment). The gross receipt as per the profit and loss account was ₹2,70,53,606 and the assessee had declared a net profit

Mahemudkhan Ajamuddin Rana, Vadodara vs. The ITO, Ward-1(3)(1), Vadodara

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

ITA 1198/AHD/2025[2018-19]Status: DisposedITAT Ahmedabad30 Jul 2025AY 2018-19

Bench: Smt. Annapurna Gupta & Shri Siddhartha Nautiyal

For Appellant: Shri Hemant Suthar, ARFor Respondent: Shri Hargovind Singh, Sr. DR

Section 115BSection 144Section 147Section 2(14)Section 69A

assessee, he failed to appear or submit any supporting documents. Given the consistent non- compliance, the Assessing Officer proceeded to make a best judgment assessment under section 144 of the Act. Accordingly, the Assessing Officer treated the entire amount of ₹67,90,000/- as unexplained money under section

Abdul Rauf Gani Ghone, Pune vs. Income Tax Officer, Ward 14(3), Pune

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

ITA 1052/PUN/2025[17-18]Status: DisposedITAT Pune30 Jul 2025

Bench: Ms.Astha Chandra & Dr.Dipak P. Ripoteआयकर अपील सं. / Ita No.1052/Pun/2025 िनधा"रण वष" / Assessment Year: 2017-18 Abdul Rauf Gani Ghone, V The Income Tax Officer, Sr.No.50/1-A, Gali No.3, S Ward-14(3), Pune. Bhagyadey Nagar, Pune – 411048. Maharashtra. Pan: Afrpg3750P Appellant/ Assessee Respondent / Revenue Assessee By Shri Nikhil Pathak-Ar & Mrs.Archena Shetty-Advocate Revenue By Shri Arvind Renge –Addl.Cit(Dr) Date Of Hearing 29/07/2025 Date Of Pronouncement 30/07/2025 आदेश/ Order Per Dr. Dipak P. Ripote, Am: This Is An Appeal Filed By Assessee Against The Order Of Ld.Commissioner Of Income Tax(Appeal)[Nfac] Passed Under Section 250 Of The Income Tax Act, 1961 For The A.Y.2017-18 Dated 19.02.2025, Emanating From Order U/S.143(3) Of The Income Tax Act, 1961, Dated 07.12.2019. The Assessee Has Raised Following Grounds Of Appeal :

Section 143(2)Section 143(3)Section 144Section 250Section 69

mutton and chicken, where cash sales are most likely to happen and accordingly cash deposits are natural. It is thus not the best judgment assessment with the reasonability of facts. 5. The Appellant Craves Leave to add, Alter or amend any of the Grounds of the Appeal, before

Natural Power Asia Private Limited, Hyderabad vs. ITO., Ward-16(1), Hyderabad

ITA 581/HYD/2025[2018-19]Status: DisposedITAT Hyderabad30 Jul 2025AY 2018-19

Bench: Us:

Section 144Section 147Section 148Section 148ASection 251(1)(a)

aforesaid amendment in Section 251 of the Act, now stands vested with the jurisdiction to set-aside and refer back a best judgment assessment order passed u/s 144 of the Act to the file of the AO for framing a fresh assessment, but the same cannot justify the refraining ... powers vested with him as per the “Proviso” to Section 251(1) of the Act set aside and refer back the impugned best judgment assessment order passed u/s 144 of the Act for framing of fresh assessment by the AO. To sum up, the CIT(A) is obligated to address

Raman, Kancheepuram vs. Assessing Officer, Kancheepuram

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

ITA 908/CHNY/2025[2017-18]Status: DisposedITAT Chennai30 Jul 2025AY 2017-18

Bench: Shri Aby T. Varkey & Shri Jagadish

For Appellant: Mr.Arunkumar ManoharanFor Respondent: DR is on leave

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

added the amount deposited during the demonetization period to the tune of Rs. Rs.10,01,501/- u/s.69 of the Act by framing best judgment assessment u/s.144 of the Act. During the appellate proceedings, the assessee brought to the notice of the Ld.CIT(A) that he is an agriculturalist, who derived

Centech Engineers Pvt. Ltd, Mumbai vs. ACIT-Circle-2(1)(1), Bengaluru

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

ITA 1059/BANG/2025[2014-15]Status: DisposedITAT Bangalore30 Jul 2025AY 2014-15

Bench: Shri Waseem Ahmed & Shri Soundararajan K.Assessment Year : 2014-15

For Respondent: Shri Madhur Kalyan Shetty

Section 142Section 143(2)Section 144Section 40A(2)(b)

assessee had not responded to the said show cause notice and therefore the AO had made the best judgment assessment u/s. 144 of the Act. As against the said order, the assessee filed an appeal before the Ld.CIT(A). As seen from the order of the Ld.CIT(A), the assessee

Prayag Capitals India Limited, Allahabad vs. ITO, Ward-2(2) Now Ward-2(1), Allahabad

In the result, the appeal of the assessee stands allowed

ITA 81/ALLD/2024[2015-16]Status: DisposedITAT Allahabad29 Jul 2025AY 2015-16

Bench: Shri Anadee Nath Misshra & Shri Subhash Malguria

Section 143(3)

learned A.R. for the assessee submitted that the assessment order had been passed u/s 143(3) of the Act. It was not a best judgment assessment order u/s 144 of the Act. Therefore, he submitted, a logical inference arises that the Assessing Officer was satisfied with the compliance made

Shree Kekri Gaushala, Ajmer vs. ITO, Ward-2(2), Ajmer

In the result, all the three appeals of the assessee are allowed as per terms indicated above

ITA 518/JPR/2025[2020-21]Status: DisposedITAT Jaipur29 Jul 2025AY 2020-21

Bench: Dr.Manish Borad

For Appellant: Shri Yogesh ParwalFor Respondent: Shri Gautam Singh Choudhary

Section 10(1)Section 11Section 12Section 12ASection 144Section 250

Assessing Officer after selecting the case for scrutiny issued notice to the assessee but there was non-compliance resulting into the best judgment assessment u/s.144 r.w.s.144B of the Act and the benefit of section 11 at Rs.30,92,606/- was denied and added in the hands of assessee. Assessee preferred

Shree Kekri Gaushala, Ajmer vs. ITO, Ward-2(2), Ajmer

In the result, all the three appeals of the assessee are allowed as per terms indicated above

ITA 517/JPR/2025[2019-20]Status: DisposedITAT Jaipur29 Jul 2025AY 2019-20

Bench: Dr.Manish Borad

For Appellant: Shri Yogesh ParwalFor Respondent: Shri Gautam Singh Choudhary

Section 10(1)Section 11Section 12Section 12ASection 144Section 250

Shree Kekri Gaushala, Ajmer vs. ITO, Ward-2(2), Ajmer

In the result, all the three appeals of the assessee are allowed as per terms indicated above

ITA 516/JPR/2025[2018-19]Status: DisposedITAT Jaipur29 Jul 2025AY 2018-19

Bench: Dr.Manish Borad

For Appellant: Shri Yogesh ParwalFor Respondent: Shri Gautam Singh Choudhary

Section 10(1)Section 11Section 12Section 12ASection 144Section 250

Mayankkumar Rameshchandra Bhatt, Vadodara vs. The Income Tax Officer, Ward-1(2)(1), Vadodara

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

ITA 1284/AHD/2024[2007-08]Status: DisposedITAT Ahmedabad29 Jul 2025AY 2007-08

Bench: Ms.Suchitra R. Kamble & Shri Makarand V.Mahadeokarasstt.Year : 2007-08 Mayankkumar Rameschandra Ito, Ward-1(2)(1) Bhatt Vs. Vadodara. B/202, Laljikrupa Society B/H. Mothers School Gotri Road, Baroda. Pan : Agypb 2066 R (Applicant) (Responent) : Shri Tushar Hemani, Sr.Advocate Assessee By Revenue By : Shri Umesh Kumar Agrawal, Sr.Dr सुनवाई क" तारीख/Date Of Hearing : 24/07/2025 घोषणा क" तारीख /Date Of Pronouncement: 29 /07/2025 आदेश आदेश/O R D E R आदेश आदेश Per Makarand V.Mahadeokar, Am: This Appeal By The Assessee Is Directed Against The Order Dated 17.05.2024 Passed Under Section 250 Of The Income-Tax Act, 1961 [Hereinafter Referred To As “The Act”] By The Commissioner Of Income Tax (Appeals), National Faceless Appeal Centre (Nfac), Delhi [Hereinafter Referred To As “Cit(A)”], For The Assessment Year 2007–08, Arising Out Of The Reassessment Order Dated 27.03.2015 Passed Under Section 144 R.W.S. 147 Of The Act By The Income Tax Officer, Ward 4(2)(4), Vadodara [Hereinafter Referred To As “Assessing Officer Or Ao”].

For Respondent: Shri Umesh Kumar Agrawal, Sr.DR

Section 10(38)Section 142(1)Section 144Section 147Section 148Section 250Section 271(1)(c)Section 69A

under section 142(1) along with questionnaires. As per the order, the assessee either did not comply or furnished inadequate replies, leading to best judgment assessment under section 144 read with section 147. The AO made the following additions in the assessment order dated 27.03.2015: - Addition

Santosh Kumar Keshri, Patna vs. Assistant Commissioner of Income Tax, Patna

In the result, the appeal filed by the assessee is dismissed

ITA 226/PAT/2024[2017-18]Status: DisposedITAT Patna28 Jul 2025AY 2017-18

Bench: Shri Duvvuru Rl Reddy, Vice-(Kz) & Shri Sanjay Awasthii.T.A. No. 226/Pat/2024 Assessment Year: 2017-2018 Santosh Kumar Keshri,………..…….…………Appellant Shop No. 3, Jaiswal Market, Sabji Mandi, Mithapur-800001, Bihar [Pan:Asapk1127E] -Vs.- Assistant Commissioner Of Income Tax,...Respondent Dc/Ac Circle-6, Patna-800001, Bihar Appearances By: Shri Supriya Sharma, C.A., Appeared On Behalf Of The Assessee Shri Ashwani Kr. Singal, Jcit, Appeared On Behalf Of The Revenue Date Of Concluding The Hearing: May 19, 2025 Date Of Pronouncing The Order: July 28, 2025 O R D E R

Section 115BSection 143(2)Section 144Section 68Section 69A

source of cash deposited during the demonetization period, but no compliance was made by the assessee. The ld. Assessing Officer proceeded with best judgment assessment under section 144 of the Income Tax Act, whereas the assessee has already complied and submitted relevant documents. The ld. Assessing Officer levied huge

Malkari Maheswari Bai, Kurnool vs. ITO., Ward-2, Kurnool

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

ITA 566/HYD/2025[2017-18]Status: DisposedITAT Hyderabad25 Jul 2025AY 2017-18

Bench: Shri Vijay Pal Rao & Shri Manjunatha G

For Appellant: CA, KA Sai Prasad And CA, P V Raghavendra KumarFor Respondent: Sri Gurpreet Singh, Sr. AR

Section 115BSection 143(2)Section 144Section 144(1)Section 144(1)(b)

assessment proceedings before the Assessing Officer is ex-parte, because, the assessee neither appeared nor filed any details. Therefore, the Assessing Officer passed best judgment assessment in terms of sec.144(1) of the Income Tax Act, 1961. Although, the assessee has filed appeal before the learned

Nagankesy Venkata Reddy, Sangareddy vs. ITO., Ward-1, Sangareddy

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

ITA 230/HYD/2025[2013-14]Status: DisposedITAT Hyderabad25 Jul 2025AY 2013-14

Bench: Shri Manjunatha G & Shri Ravish Sood

For Appellant: CA Kumar Pal TatedFor Respondent: Shri Gurpreet Singh, Sr. AR

Section 142(1)Section 143(2)Section 144Section 147Section 148Section 250Section 69A

Rs.4,764/-, disallowance as per Chapter-VIA amounting to Rs.45,000/- and addition on account of undisclosed income of Rs.89,485/- vide best Judgment assessment order passed 4 ITA.No.230/Hyd./2025 u/sec.147 r.w.s.144 r.w.s.144B of the Income Tax Act, 1961. 3. On being aggrieved by the assessment order passed ... issued u/sec.142(1) of the Act on various dates, for which, no compliance from the assessee. Therefore, we cannot find fault with the best judgment assessment order passed by the Assessing Officer. Further, although, the assessee has filed appeal before the learned CIT(A), once again, there is no compliance

Y.Anthonysamy, Panruti vs. The Income Tax Officer, Ward-4, Cuddalore

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

ITA 1579/CHNY/2025[2011-2012]Status: DisposedITAT Chennai25 Jul 2025AY 2011-2012

Bench: Shri George George Kand Shri S.R. Raghunathaआयकर अपील सं./Ita No.: 1579/Chny/2025 िनधा"रण वष"/Assessment Year: 2011-12 Shri Y. Anthonisamy, The Income Tax Officer, 41-Andavar Nagar, Vs. Ward 4, 1St Street, Panikankuppan, Cuddalore. Panruti – 607 106. Pan: Aokpa 3874N (अपीलाथ"/Appellant) (""यथ"/Respondent) अपीलाथ" क" ओर से/Appellant By : Shri Hitesh, Advocate For Shri D. Anand, Advocate ""यथ" क" ओर से/Respondent By : Shri Ar.V. Sreenivasan, Cit सुनवाई क" तारीख/Date Of Hearing : 23.07.2025 घोषणा क" तारीख/Date Of Pronouncement : 25.07.2025

For Appellant: Shri Hitesh, Advocate for Shri D. Anand, AdvocateFor Respondent: Shri AR.V. Sreenivasan, CIT

Section 144Section 250

three notices issued from the office of the First Appellate Authority. Further, we also notice that the assessment has been completed on best judgment assessment u/s. 144 r.w.s. 147 of the Act. 4. The Ld.AR for the assessee submitted that the order passed by the FAA is ex-parte

Thiru Arutprakasa Vallalar Deiva Nilayam, Cuddalorre vs. The Income Tax Officer, Ward - 1, Cuddalore

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

ITA 1578/CHNY/2025[2018-19]Status: DisposedITAT Chennai25 Jul 2025AY 2018-19

Bench: Shri George George Kand Shri S.R. Raghunathaआयकर अपील सं./Ita No.: 1578/Chny/2025 िनधा"रण वष"/Assessment Year: 2018-19

For Appellant: Shri Hitesh, Advocate for Shri D. Anand, AdvocateFor Respondent: Shri AR.V. Sreenivasan, CIT

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 of the Act. 5. On perusing the order of FAA, we noted that the assessee had filed application for condonation

Arulmigu Venkatesaperumal Thirukkoil, Tiruppur vs. The Assistant Commissioner of Income-Tax (Exemptions), Coimbatore

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

ITA 1284/CHNY/2025[2018-19]Status: DisposedITAT Chennai25 Jul 2025AY 2018-19

Bench: Shri George George Kand Shri Padmavathy Sआयकर अपील सं./Ita No.: 1284/Chny/2025 िनधा"रण वष"/Assessment Year: 2018-19

For Appellant: Shri N.V. Krishnan, AdvocateFor Respondent: Dr.M. Sri Shanmuga Priya, JCIT

Section 144Section 147Section 250

notices issued from the office of the First Appellate Authority. Further, we also notice that the assessment has been completed on best judgment assessment u/s. 147 r.w.s. 144 of the Act. 3. The Ld.AR for the assessee submitted that the order passed by the FAA is ex-parte

Rangegowda Nakoppalu Murthy Siddappa, Koppalu vs. Income Tax Officer, Ward-1, Chickmagalur

In the result, the appeal filed by the assessee is partly allowed

ITA 223/BANG/2025[2017-18]Status: DisposedITAT Bangalore25 Jul 2025AY 2017-18

Bench: Shri Laxmi Prasad Sahu & Shri Soundararajan K.Assessment Year : 2017-18

For Appellant: Shri Gokul, AdvocateFor Respondent: Advocate, Standing

Section 142(1)Section 144Section 69

demonetisation period. 8. The assessee not only appeared before the Ld.CIT(A) but also before the AO and therefore the AO made a best judgment assessment u/s. 144 of the Act. In such circumstances, to give another opportunity to the assessee, we are inclined to set aside the order