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“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
79
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
78
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
64
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

Bihar State Road Development Corpn.Ltd., Patna vs. CIT (Appeal), Delhi

In the result, all the appeals filed by the assessee are partly allowed for statistical purposes

ITA 335/PAT/2024[2018-19]Status: DisposedITAT Patna24 Jul 2025AY 2018-19

Bench: Shri Sonjoy Sarma & Shri Rakesh Mishra

Section 143(3)Section 250Section 37Section 80I

that the order of the ld. Commissioner of Income Tax (Appeal) as well as the Ld. assessing officer is far from best judgment assessment as envisaged in the Act. 8. For that the Ld. Commissioner of Income Tax (Appeal) as well as the Ld. assessing officer has erred in disallowing ... that the order of the ld. Commissioner of Income Tax (Appeal) as well as the Ld. assessing officer is far from best judgment assessment as envisaged in the Act. 8. For that the ld. Commissioner of Income Tax (Appeal) as well as the ld. assessing officer has erred in initiating

Bihar State Road Development Corporation Limited, Patna vs. ACIT, Cor-2, Patna

In the result, all the appeals filed by the assessee are partly allowed for statistical purposes

ITA 334/PAT/2024[2017-18]Status: DisposedITAT Patna24 Jul 2025AY 2017-18

Bench: Shri Sonjoy Sarma & Shri Rakesh Mishra

Section 143(3)Section 250Section 37Section 80I

that the order of the ld. Commissioner of Income Tax (Appeal) as well as the Ld. assessing officer is far from best judgment assessment as envisaged in the Act. 8. For that the Ld. Commissioner of Income Tax (Appeal) as well as the Ld. assessing officer has erred in disallowing ... that the order of the ld. Commissioner of Income Tax (Appeal) as well as the Ld. assessing officer is far from best judgment assessment as envisaged in the Act. 8. For that the ld. Commissioner of Income Tax (Appeal) as well as the ld. assessing officer has erred in initiating

Bihar State Road Development Corporation Ltd, Patna vs. ACIT, Cir-2, P)Atna

In the result, all the appeals filed by the assessee are partly allowed for statistical purposes

ITA 333/PAT/2024[2014-15]Status: DisposedITAT Patna24 Jul 2025AY 2014-15

Bench: Shri Sonjoy Sarma & Shri Rakesh Mishra

Section 143(3)Section 250Section 37Section 80I

that the order of the ld. Commissioner of Income Tax (Appeal) as well as the Ld. assessing officer is far from best judgment assessment as envisaged in the Act. 8. For that the Ld. Commissioner of Income Tax (Appeal) as well as the Ld. assessing officer has erred in disallowing ... that the order of the ld. Commissioner of Income Tax (Appeal) as well as the Ld. assessing officer is far from best judgment assessment as envisaged in the Act. 8. For that the ld. Commissioner of Income Tax (Appeal) as well as the ld. assessing officer has erred in initiating

Bihar State Road Development Corpn. Ltd., Patna vs. ACIT, Circle 2, Patna

In the result, all the appeals filed by the assessee are partly allowed for statistical purposes

ITA 332/PAT/2024[2014-15]Status: DisposedITAT Patna24 Jul 2025AY 2014-15

Bench: Shri Sonjoy Sarma & Shri Rakesh Mishra

Section 143(3)Section 250Section 37Section 80I

that the order of the ld. Commissioner of Income Tax (Appeal) as well as the Ld. assessing officer is far from best judgment assessment as envisaged in the Act. 8. For that the Ld. Commissioner of Income Tax (Appeal) as well as the Ld. assessing officer has erred in disallowing ... that the order of the ld. Commissioner of Income Tax (Appeal) as well as the Ld. assessing officer is far from best judgment assessment as envisaged in the Act. 8. For that the ld. Commissioner of Income Tax (Appeal) as well as the ld. assessing officer has erred in initiating

Bihar State Road Development Corpn. Ltd., Patna vs. ACIT, Circle 2, Patna

In the result, all the appeals filed by the assessee are partly allowed for statistical purposes

ITA 331/PAT/2024[2013-14]Status: DisposedITAT Patna24 Jul 2025AY 2013-14

Bench: Shri Sonjoy Sarma & Shri Rakesh Mishra

Section 143(3)Section 250Section 37Section 80I

that the order of the ld. Commissioner of Income Tax (Appeal) as well as the Ld. assessing officer is far from best judgment assessment as envisaged in the Act. 8. For that the Ld. Commissioner of Income Tax (Appeal) as well as the Ld. assessing officer has erred in disallowing ... that the order of the ld. Commissioner of Income Tax (Appeal) as well as the Ld. assessing officer is far from best judgment assessment as envisaged in the Act. 8. For that the ld. Commissioner of Income Tax (Appeal) as well as the ld. assessing officer has erred in initiating

Bihar State Road Development Corporation Limited, Patna vs. ITO Ward 2(1) Patna, Patna

In the result, all the appeals filed by the assessee are partly allowed for statistical purposes

ITA 330/PAT/2024[2012-13]Status: DisposedITAT Patna24 Jul 2025AY 2012-13

Bench: Shri Sonjoy Sarma & Shri Rakesh Mishra

Section 143(3)Section 250Section 37Section 80I

that the order of the ld. Commissioner of Income Tax (Appeal) as well as the Ld. assessing officer is far from best judgment assessment as envisaged in the Act. 8. For that the Ld. Commissioner of Income Tax (Appeal) as well as the Ld. assessing officer has erred in disallowing ... that the order of the ld. Commissioner of Income Tax (Appeal) as well as the Ld. assessing officer is far from best judgment assessment as envisaged in the Act. 8. For that the ld. Commissioner of Income Tax (Appeal) as well as the ld. assessing officer has erred in initiating

Manish Nanalal Dudhaiya, Badlapur vs. Commissionar ITO, Kalyan

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

ITA 2019/MUM/2025[2012-2013]Status: DisposedITAT Mumbai24 Jul 2025AY 2012-2013

Bench: Hon’Ble Shri Sandeep Gosain & Shri Girish Agrawalmanish Nanalal Dudhaiya Vs. Ito – 2(2) 10, Chinar Society 2Nd Floor Wayle Nagar Ambarnath, Thane, Kulgaon Mohan Plaza, So, 421503 Khadakpada Kalian Pan/Gir No. Aibpd6371L (Applicant) (Respondent)

Section 144Section 249(4)Section 249(4)(b)Section 250

still assessee did not cooperate and not filed any documentary 3 Manish Nanalal Dudhaiya., Mumbai. evidences. Therefore assessment was completed based on “best judgment assessment” u/s 144 of the Act on the basis of information available on record. 5. Against the said order of assessment although the assessee preferred

Professional Automotives Private Limited, Jammu vs. Assistant Commissioner of Income Tax, Central Circle-1, Jaipur

ITA 813/JPR/2025[2017-18]Status: DisposedITAT Jaipur23 Jul 2025AY 2017-18
For Appellant: Shri Tarun Mittal, CAFor Respondent: Shri Ajey Malik, CIT (Th. V.C)
Section 132(4)Section 143(3)Section 37(1)

element of guess work. The above decision of Apex Court is sought to be distinguished on the ground that itwas a case of best judgment assessment and therefore would have no application to the case of undisclosed income. We do not accept the above submission. As in case of best ... assessing authority must have material before it to prove the exact turnover suppressed. If that is true, there is no question of "best judgment assessment. The assessee cannot be permitted to take advantage of his own illegal acts. It was his duty to place all facts truthfully before the assessing

Ningaiah Siddu, Mysore vs. DCIT, Circle-1(1)& Tps, Mysore

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

ITA 921/BANG/2025[2020-21]Status: DisposedITAT Bangalore23 Jul 2025AY 2020-21

Bench: Shri Prashant Maharishi & Shri Keshav Dubeyassessment Year: 2020-21

For Appellant: Shri Ravishankar, AdvocateFor Respondent: Shri Subramanian, Jt.CIT (DR)(ITAT), Bengaluru
Section 144Section 57Section 69C

issued 3 notices, but none of them were complied with and therefore show cause notice was also issued which resulted in best judgment assessment u/s. 144 of the Act. 3. As per the return of income filed by the assessee, the main source of income is interest received from Bank

Shruthi Kishore, Bengaluru vs. Income Tax Officer, Bengaluru

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

ITA 550/BANG/2025[2017-18]Status: DisposedITAT Bangalore23 Jul 2025AY 2017-18

Bench: Shri Waseem Ahmed & Shri Keshav Dubeyassessment Year: 2017-18

For Appellant: Shri Krishna Upadhya, CAFor Respondent: Shri Ganesh R Ghale, Advocate for Standing
Section 142(1)Section 143(2)Section 56Section 56(2)(vii)Section 69ASection 80T

appellant did not comply to the show cause notice. In view of above facts, assessing officer completed assessment under section 144 as best judgment assessment and made additions on following issues: 1. Addition u/s. 69A ₹10,00,000/- 2. Interest income u/s. 80TTA ₹11,263/- In view of the above

Shivnarayan Rajput, Hoshangabad, Madhya Pradesh vs. Income Tax Officer Ward 1 Itarsi, Aaykar Bhawan, Itarsi

In the result appeal of the assessee is allowed for statistical

ITA 771/IND/2024[2012-13]Status: DisposedITAT Indore22 Jul 2025AY 2012-13

Bench: Shri B.M. Biyani & Shri Paresh M Joshishivnarayan Rajput, Ito, Ward-1, बनाम/ House No.33

Section 144Section 147Section 246ASection 250Section 253

impugned assessment order” by exercising the power u/s 144 of the Act which is conferred upon the Ld. A.O under the Act called “best judgment assessment”. 2.2 That the assessee being aggrieved by the “impugned assessment order” prefers first appeal u/s 246A of the Act before

M/S. Tbea Shenyang Trasformer Gropup Company Limited, Vadodara vs. The Deputy Commissioner of Income Tax, Int. Tax., Vadodara

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

ITA 581/AHD/2017[2012-13]Status: DisposedITAT Ahmedabad22 Jul 2025AY 2012-13

Bench: Smt. Annapurna Gupta & Ms. Suchitra Kambleआयकर अपील सं./I.T.A. No. 581/Ahd/2017 (िनधा"रण वष" / Assessment Year : 2012-13) बनाम/ M/S. Tbea Shenyang Deputy Commissioner Of Transformer Group Income Tax Vs. Company Limited International Taxation, National Highway No.-8, Vadodara Villae : Miyagam, Karja, Vadodara, Gujarat - 390007 "थायी लेखा सं./जीआइआर सं./Pan/Gir No. : Aadct4557F (Appellant) .. (Respondent) अपीलाथ" ओर से /Appellant By : Shri Arpit Jain, Ar ""यथ" क" ओर से/Respondent By : Shri Mahesh Shah, Cit. Dr 24/04/2025 Date Of Hearing Date Of Pronouncement 22/07/2025 O R D E R Per Smt. Annapurna Gupta, Am:

For Appellant: Shri Arpit Jain, ARFor Respondent: Shri Mahesh Shah, CIT. DR
Section 143(3)Section 9Section 92C

basis of the material collected or available on record. In such circumstances, the ALP determined would be on the parity with a best judgment assessment Such assessment (determination of ALP) would have some approximations and estimations. But even such approximations and estimations mat satisfy dictates of justice and fair play

Poladpur Taluka Prathamik Shikshak Sahkari Patphedhi Maryadit Poladpur Shik, Poladpur, Raigad vs. ITO, Ward 2, Panvel

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

ITA 1457/PUN/2025[2016 - 17]Status: DisposedITAT Pune22 Jul 2025

Bench: Dr.Manish Borad & Shri Vinay Bhamore

For Appellant: NoneFor Respondent: Shri Akhilesh Srivastava
Section 143(1)Section 144Section 147Section 148Section 250Section 250(6)Section 69A

were served upon the assessee. There was no compliance from the assessee’s side. Eventually, ld. Assessing Officer concluded the best judgment assessment u/s.144 of the Act making addition of Rs.1.24 crore as unexplained money u/s.69A of the Act. Aggrieved assessee preferred appeal before ld.CIT(A) and ld.CIT(A) dismissed

Devika Buildestate Private Limited, Jaipur vs. Income Tax Officer, Jaipur

In the result, the appeal of the assessee is allowed

ITA 525/JPR/2025[2012-13]Status: DisposedITAT Jaipur21 Jul 2025AY 2012-13

Bench: DR. S. SEETHALAKSHMI (Judicial Member), SHRI RATHOD KAMLESH JAYANTBHAI (Accountant Member)

For Appellant: Sh. Vinod Kumar Gupta, CAFor Respondent: Sh. Gautam Singh Choudhary, Addl. CIT
Section 133(6)Section 142(1)Section 143(2)Section 143(3)Section 271(1)(c)

silent about the defects in the books of the assessee, thus, the additions made on estimated basis under the best judgment assessment are arbitrary in absence of any plausible reason to justify such estimation. 17. In result, the additional ground raised by the assessee regarding estimated additions / disallowances without rejection ... allude to the settled position of law that the books of account have to be necessarily rejected before the AO proceeds to the best judgment assessment upon fulfilment of conditions mentioned in the Act. The underlying rationale behind such an action is to meet the standards of correct computation

Vinita Bajoria, Jaipur vs. Income-Tax Officer, Jaipur

In the result, the appeal of the assessee is allowed

ITA 370/JPR/2025[201617]Status: DisposedITAT Jaipur21 Jul 2025

Bench: DR. S. SEETHALAKSHMI (Judicial Member), SHRI RATHOD KAMLESH JAYANTBHAI, AM आयकर अपील सं./ITA No. 370/JP/2025 निर्धारण वर्ष / Assessment Year : 2016-17 Vinita Bajoria 1, Ganesh Colony Moti Doongri Road, Jaipur बनाम Income Tax Officer, Ward 5(2), Jaipur स्थायी लेखा सं. / जीआईआर सं./PAN/GIR No.: AEBPB4873M अपीलार्थी / Appellant प्रत्यर्थी / Respondent निर्धारिती की ओर से / Assessee by: Sh. Manoj Choudhary, CA राजस्व की ओर से / Revenue by : Sh. Gorav Avasthi, JCIT सुनवाई की तारीख / Date of Hear

For Appellant: Sh. Manoj Choudhary, CAFor Respondent: Sh. Gorav Avasthi, JCIT
Section 147Section 148Section 148A

Issued..." Further, it is pertinent to note clause (b) of sub-section 1 of section 144 of Act which is reproduced as under:- "...Best judgment assessment. 144. (1) If any person- (a)... (b) fails to comply with all the terms of a notice issued under sub-section (1) of section

Barigala Saroja, Guntur vs. Income Tax Officer, Ward-2(1), Guntur

In the result, appeal filed by the assessee is allowed for statistical purposes as indicated herein above

ITA 472/VIZ/2024[2017-18]Status: DisposedITAT Visakhapatnam18 Jul 2025AY 2017-18

Bench: the Tribunal. In respect of the belated filing of the appeal, the assessee filed a petition seeking condonation of delay along with an affidavit dated 24/01/2025 and explained the reasons for such delay. For the sake of immediate reference, the contents of the said affidavit are extracted herein below: "1.......

Section 133(6)Section 139(4)Section 142(1)Section 144Section 69A

assessee with respect to the notice U/s. 142(1) and show cause notice issued, the Ld. AO proceeded to complete the assessment as ‘best judgment assessment U/s. 142(1) r.w.s 144(1)(b) of the Act’. Accordingly, the Ld. AO completed the assessment by treating the total cash deposits made

Incometax Officer, Thriuvallur vs. Gt60 Arungulam Primary Agri Cooperative Credit Society, Tiruttani

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

ITA 2781/CHNY/2024[2018-19]Status: DisposedITAT Chennai17 Jul 2025AY 2018-19

Bench: Shri S.S. Viswanethra Ravi & Shri Amitabh Shuklaआयकर अपील सं./I.T.A. No.2781/Chny/2024 िनधा"रण वष"/Assessment Year: 2018-19 The Income Tax Officer, Vs. Gt60 Arungulam Primary Agri Ward 1, Cooperative Credit Society, Tiruvallur. No. 1, Periya Theru, Thumbikulam Village, Thalavedu Post & Taluk, Tiruvallur 631 212. [Pan: Aabag2568F] (अपीलाथ"/Appellant) (""थ"/Respondent) अपीलाथ" की ओर से / Appellant By : Ms. R. Anita, Addl. Cit ""थ" की ओर से/Respondent By : Shri Malar Mannan, Advocate सुनवाई की तारीख/ Date Of Hearing : 02.06.2025 घोषणा की तारीख /Date Of Pronouncement : 17.07.2025 आदेश /O R D E R Per S.S. Viswanethra Ravi: This Appeal Filed By The Revenue Is Directed Against The Order Dated 26.07.2024 Passed By The Ld. Commissioner Of Income Tax (Appeals), National Faceless Appeal Centre (Nfac), Delhi For The Assessment Year 2018-19. 2. We Find That This Appeal Is Filed With A Delay Of 24 Days. The Ito, Ward 1, Tiruvallur Filed An Affidavit For Condonation Of Delay Stating The Reasons. Upon Hearing Both The Parties & On Examination Of The Said

For Appellant: Ms. R. Anita, Addl. CITFor Respondent: Shri Malar Mannan, Advocate
Section 142(1)Section 148Section 69ASection 69C

make an assessment of the total income or loss to the best of his judgment and determine the tax payable by the assessee. Best judgment assessment should be made with fair-play and justice. In making a best judgment assessment, the Assessing Officer does not posses absolutely arbitrary authority ... should be guided by rules of justice, equity and good conscience [Abdul Qayum & Co., Vs. CIT, (1933) 1 ITR 375, 378 (Oudh)]. A best judgment assessment is not by way penalty for non-compliance [Jot Ram Sher Singh Vs. CIT, (1934) 2 ITR 129 (All) and it cannot be made

Dy. Commissioner of Income Tax (Exemptions), Circle, Pune vs. Swami Shanti Prakash Ashram Trust, Thane

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

ITA 1488/PUN/2025[2015-2016]Status: DisposedITAT Pune16 Jul 2025AY 2015-2016

Bench: Dr.Manish Borad & Shri Vinay Bhamore

For Appellant: NoneFor Respondent: Shri Akhilesh Srivastava
Section 144Section 147Section 250Section 250(6)Section 251(1)(a)

ld.CIT(A) has restored the issue to the file of ld. Assessing Officer observing that the assessment order has been framed u/s.144 as best judgment assessment. However, on going through the assessment order, we observe that the assessment has been framed u/s.147 r.w.s.144B of the Act. Also, assessee has made

Abdul Majid Jainuddin Chikate, Dapoli vs. Income Tax Officer, Ratnagiri

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

ITA 1455/PUN/2025[2012-13]Status: DisposedITAT Pune16 Jul 2025AY 2012-13

Bench: Dr.Manish Borad

For Appellant: Shri Pramod S ShingteFor Respondent: Shri Deepak Kumar Kedia
Section 142(1)Section 144Section 147Section 148Section 2(14)Section 250Section 80C

submitted any compliance to the notice u/s.142(1) of the Act. Ld. Assessing Officer finally issued show cause notice before proceeding to frame best judgment assessment. Assessee filed reply stating that the source of alleged cash deposit is from sale of Agricultural land. However, for lack of necessary details about

Umesh Pandey, Mumbai vs. Income Tax Officer -22(3)(6), Mumbai

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

ITA 2566/MUM/2025[2014-15]Status: DisposedITAT Mumbai16 Jul 2025AY 2014-15

Bench: SHRI OM PRAKASH KANT (Accountant Member), MS. KAVITHA RAJAGOPAL (Judicial Member)

For Appellant: Shri B. N. RaoFor Respondent: 09.07.2025
Section 144Section 147Section 148Section 250Section 69A

several opportunities, the ld. AO passed the assessment order u/s. 147 r.w.s. 144 r.w.s. 144B of the Act, dated 31.03.2022, being the best judgment assessment, determining the total income at Rs. 59,40,580/- after making additions of Rs. 33,78,400/- as unexplained money