“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

Janki Nipul Savla, Mumbai vs. Income Tax Officer International Taxation Ward 4(2)(1), Mumbai

ITA 982/MUM/2025[2022-23]Status: DisposedITAT Mumbai27 Jun 2025AY 2022-23

Bench: Shri Rahul Chaudhary (Jm) & Shri Omkareshwar Chidara (Am) Janki Nipul Savla Ito Ward 4(2)(1) Po Box No. 33019-00600 Room No. 632 Nairobi, Kenya Vs. 6Th Floor C/O. Office No. 101, Jeevan C-41 To C-43 Jyoti Acrcade, Bcabin Kautilya Bhavan, Naupada, Thane West Bkc, Bandra East Maharashtra-400 602. Mumbai-400 051. Pan : Gurps1036P Appellant Respondent

For Appellant: Shri Krishna KumarFor Respondent: Shri Hemant Vora

Section 142(1)Section 144Section 69

Savla AO which says that in case of non-compliance of this notice, assessment would be completed under section 144 of Act as best judgment assessment on the basis of material available on record. As the appellant failed to comply with the notices dated

Income Tax Officer Ward-12(2)(1), Mumbai vs. Devraj Multitrade Private Limited, Mumbai

In the result, the appeals of the revenue are dismissed for AYs 2014-15,

ITA 3550/MUM/2023[2016-17]Status: DisposedITAT Mumbai27 Jun 2025AY 2016-17

Bench: Shri Rahul Chaudhary & Smt. Renu Jauhriआयकर अपील सुं./Ita No. 3513/Mum/2023 (नििाारण वर्ा / Assessment Year :2013-14) आयकर अपील सुं./Ita No. 3512/Mum/2023 (नििाारण वर्ा / Assessment Year :2014-15) आयकर अपील सुं./Ita No. 3511/Mum/2023 (नििाारण वर्ा / Assessment Year :2015-16) आयकर अपील सुं./Ita No. 3550/Mum/2023 (नििाारण वर्ा / Assessment Year :2016-17)

For Appellant: Shri Ketan VajaniFor Respondent: Smt. Sanyogita Nagpal

Section 144Section 250Section 68

obtained accommodation entry from M/s. Sharan Bio Medicine Ltd., which is required to be verified. However, in the assessment order, while making the best judgment assessment, the Ld. AO has treated the entire trade receivable of Rs. 19,27,64,275/- as fictitious and added the same to the total ... assessee has not submitted any details/documents before the Ld. AO leaving him with no option but to make a best judgment assessment. Further, Ld. CIT(A) has also not sought any remand report from the Ld. AO in respect of documents furnished before him. Moreover, some of the documents have

Income Tax Officer - Ward-12(2)(1), Mumbai vs. Devraj Multitrade Private Limited, Mumbai

In the result, the appeals of the revenue are dismissed for AYs 2014-15,

ITA 3513/MUM/2023[2013-14]Status: DisposedITAT Mumbai27 Jun 2025AY 2013-14

For Appellant: Shri Ketan VajaniFor Respondent: Smt. Sanyogita Nagpal

Section 144Section 250Section 68

Income Tax Officer - Ward-12(2)(1), Mumbai vs. Devraj Multitrade Private Limited, Mumbai

In the result, the appeals of the revenue are dismissed for AYs 2014-15,

ITA 3512/MUM/2023[2014-15]Status: DisposedITAT Mumbai27 Jun 2025AY 2014-15

For Appellant: Shri Ketan VajaniFor Respondent: Smt. Sanyogita Nagpal

Section 144Section 250Section 68

Income Tax Officer Ward-12(2)(1), Mumbai vs. Devraj Multitrade Private Limited, Mumbai

In the result, the appeals of the revenue are dismissed for AYs 2014-15,

ITA 3511/MUM/2023[2015-16]Status: DisposedITAT Mumbai27 Jun 2025AY 2015-16

For Appellant: Shri Ketan VajaniFor Respondent: Smt. Sanyogita Nagpal

Section 144Section 250Section 68

Chinnapaiya Gounder Manickam, Dharmapuri vs. ITO Ward 1, Dharmapuri

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

ITA 705/CHNY/2025[2017-18]Status: DisposedITAT Chennai26 Jun 2025AY 2017-18

Bench: Shri George George K

For Appellant: Shri G. Akash, AdvocateFor Respondent: Smt. Samantha Mullamudi

Section 144Section 250

dismissed the appeal of the assessee in-limine without adjudicating the issues on merits. Further, the assessment has been completed on best judgment assessment u/s. 144 of the Act. 3. The Ld.AR for the assessee submitted that the FAA has dismissed the appeal for non-compliance and not on merits ... since the assessee had not filed the return of income or furnished the details within the time given, the assessment was completed on best judgment assessment. It was prayed, in the interest of justice and equity, assessee may be provided with one more opportunity to present his case before

Ramichetti Venugopal, Dharmapuri vs. ITO, Ward-1, Dharmapuri

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

ITA 1198/CHNY/2025[2017-18]Status: DisposedITAT Chennai26 Jun 2025AY 2017-18

Bench: Shri George George K

For Appellant: Shri S. Sridhar, AdvocateFor Respondent: Smt. Samantha Mullamudi

Section 144Section 250

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

Mangilal Datla, Banswara vs. Income Tax Officer, Ward Banswara, Banswara

ITA 304/JODH/2025[2017-18]Status: DisposedITAT Jodhpur25 Jun 2025AY 2017-18

Section 115BSection 142(1)Section 147Section 148Section 250Section 69A

IN THE INCOME TAX APPELLATE TRIBUNAL JODHPUR BENCH, JODHPUR. BEFORE: DR. MITHA LAL MEENA, ACCOUNTANT MEMBER & DR. S. SEETHALAKSHMI, JUDICIAL

Deputy Commissioner of Income Tax, Central Circle-2, Ludhiana vs. Malbros International Pvt Ltd, Faridkot

In the result, both the appeals and the Cross Objections

ITA 993/CHANDI/2024[2016-17]Status: DisposedITAT Chandigarh25 Jun 2025AY 2016-17

For Appellant: Shri Sudhir Sehgal, AdvocateFor Respondent: Smt. Kusum Bansal, CIT DR

Section 249Section 253Section 3Section 5

taxmann.com 16 (Gujarat) wherein, it has been held as under: “Section 144, read with section 143, of the Income-tax Act, 1961 - Best judgment assessment [Addition] - Assessing Officer made additions without rejecting books of account of assessee during assessment under sections 144 and 143 Commissioner (Appeals) deleted addition on ground ... Officer were mentioned in audited accounts and therefore, they could not be added without rejecting books of account - He, further held that in best judgment assessment fair estimate of income of assessee should have a reasonable nexus with available material and circumstances of case Whether, where addition was made without

Deputy Commissioner of Income Tax, Central Circle-2, Ludhiana vs. Malbros International Pvt Ltd, Faridkot

In the result, both the appeals and the Cross Objections are dismissed

ITA 992/CHANDI/2024[2017-18]Status: DisposedITAT Chandigarh25 Jun 2025AY 2017-18

Bench: Shri Rajpal Yadav & Shri Krinwant Sahayआयकर अपील सं./ Ita Nos. 992 & 993/Chd/2024 "नधा"रण वष" / Assessment Years: 2017-18, 2016-17 The Dcit, Vs Malbros International Pvt. Ltd., Central Circle-2, Village – Mansoorwal, Teh-Zira, Ludhiana. Head Offices Old Cantt. Road, Faridkot. "थायी लेखा सं./Pan No: Aadcm7203R अपीलाथ"/Appellant ""यथ"/Respondent & C.O. Nos. 46 & 45/Chd/2024 In आयकर अपील सं./ Ita Nos. 992 & 993/Chd/2024 "नधा"रण वष" / Assessment Year: 2017-18, 2016-17 Malbros International Pvt. Ltd., The Dcit, Village – Mansoorwal, Teh-Zira, Vs Central Circle-2, Head Offices Old Cantt. Road, Ludhiana. Faridkot. "थायी लेखा सं./Pan No: Aadcm7203R अपीलाथ"/Appellant ""यथ"/Respondent Assessee By : Shri Sudhir Sehgal, Advocate Revenue By : Smt. Kusum Bansal, Cit Dr Date Of Hearing : 14.05.2025 Date Of Pronouncement : 25.06.2025

For Appellant: Shri Sudhir Sehgal, AdvocateFor Respondent: Smt. Kusum Bansal, CIT DR

Section 249Section 253Section 3Section 5

taxmann.com 16 (Gujarat) wherein, it has been held as under: “Section 144, read with section 143, of the Income-tax Act, 1961 - Best judgment assessment [Addition] - Assessing Officer made additions without rejecting books of account of assessee during assessment under sections 144 and 143 - Commissioner (Appeals) deleted addition on ground ... Officer were mentioned in audited accounts and therefore, they could not be added without rejecting books of account - He, further held that in best judgment assessment fair estimate of income of assessee should have a reasonable nexus with available material and circumstances of case - Whether, where addition was made without

Bharat Mohanlal Solanki, Pune vs. ITO Ward 5(2), Pune

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

ITA 898/PUN/2025[2017-18]Status: DisposedITAT Pune25 Jun 2025AY 2017-18

Bench: Dr.Manish Boradआयकर अपील सं. / Ita No.898/Pun/2025 Assessment Year : 2017-18

For Appellant: Shri Sanket JoshiFor Respondent: Date of hearing

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

notices u/s.143(2)/142(1) of the Act assessee failed to respond on the given dates of hearing. Ld. Assessing Officer passed the best judgment assessment u/s.144 of the Act making addition of Rs.31,13,500/-. In the appeal filed before ld.CIT(A), assessee stated in the statement of facts

Chetan Gulabrao Patil, Chalisgaon vs. Income Tax Officer Ward 2 (1), Nashik

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

ITA 1213/PUN/2025[2023-2024]Status: DisposedITAT Pune25 Jun 2025AY 2023-2024

Bench: Dr.Manish Boradआयकर अपील सं. / Ita No.1213/Pun/2025 Assessment Year : 2023-24

For Appellant: Shri Avishkar PhanseFor Respondent: Date of hearing

Section 132Section 144Section 250Section 69A

form of a shop. During the course of assessment proceedings, assessee failed to make proper submissions and assessment was framed as best judgment assessment u/s.144 of the Act. Aggrieved assessee preferred appeal before ld.CIT(A) but failed to succeed. 4. Now the assessee is in appeal before this Tribunal

Gurupada Maji, Purulia vs. Addl. C.I.T., Central Range - 2, Kolkata

In the result, all the four appeals of the assessee are allowed for statistical purposes

ITA 393/KOL/2025[2021-22]Status: DisposedITAT Kolkata25 Jun 2025AY 2021-22

Bench: Shri George Mathan & Shri Rakesh Mishra

Section 132Section 153ASection 250Section 269SSection 271Section 271D

unavoidable situation, which led to the delay, and the rejection without considering the genuine cause is against the principles of natural justice. 3. Best Judgment Assessment - Order Pending Revision under Amended Finance Act: The assessment order was framed under best judgment assessment and is currently under challenge before

Gurupada Maji, Purulia vs. Addl. C.I.T., Central Range - 2, Kolkata

In the result, all the four appeals of the assessee are allowed for statistical purposes

ITA 392/KOL/2025[2020-21]Status: DisposedITAT Kolkata25 Jun 2025AY 2020-21

Bench: Shri George Mathan & Shri Rakesh Mishra

Section 132Section 153ASection 250Section 269SSection 271Section 271D

Gurupada Maji, Purulia vs. Addl. C.I.T., Central Range - 2, Kolkata

In the result, all the four appeals of the assessee are allowed for statistical purposes

ITA 391/KOL/2025[2019-20]Status: DisposedITAT Kolkata25 Jun 2025AY 2019-20

Bench: Shri George Mathan & Shri Rakesh Mishra

Section 132Section 153ASection 250Section 269SSection 271Section 271D

Gurupada Maji, Purulia vs. Addl. CIT, Central Range - 2, Kolkata

In the result, all the four appeals of the assessee are allowed for statistical purposes

ITA 376/KOL/2025[2018-19]Status: DisposedITAT Kolkata25 Jun 2025AY 2018-19

Bench: Shri George Mathan & Shri Rakesh Mishra

Section 132Section 153ASection 250Section 269SSection 271Section 271D

Teju Kiran Hole Narsipura Murthy, Mysore vs. Income Tax Officer, Ward-3(2)(1), Bengaluru

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

ITA 789/BANG/2025[2016-17]Status: DisposedITAT Bangalore25 Jun 2025AY 2016-17

Bench: Shri Laxmi Prasad Sahu & Shri Soundararajan K.Assessment Year : 2016-17

For Appellant: NoneFor Respondent: Shri Subramanian .S, JCIT-DR

Section 115A(5)Section 115BSection 144C(1)Section 144C(15)(b)Section 148Section 234ASection 250Section 271(1)(c)Section 68Section 69

issued notices. Since the assessee had not responded to any of the notices issued by the AO, the AO had passed a best judgment assessment order u/s. 144 of the Act. Similarly, the Ld.CIT(A) had also dismissed the appeal on the ground that the assessee had not responded

Sonu Jain Through Legal Heir and Father of Late Sonu Jain Shri Rajendra Jain, Guna vs. Income Tax Officer Guna, Guna

In the result, the appeal is partly allowed

ITA 158/AGR/2025[2016-17]Status: DisposedITAT Agra24 Jun 2025AY 2016-17

Bench: SHRI SUNIL KUMAR SINGH (Judicial Member), SHRI MANISH AGARWAL (Accountant Member)

Section 142(1)Section 147Section 148Section 148ASection 149(1)(b)Section 250Section 69A

assessee-appellant before him. Our aforesaid conviction that it is not obligatory on the part of the CIT(A) to set aside all best judgment assessment orders passed u/s 144 of the Act to the file of the AO is further fortified on looking at the language used

Singh Carriers, Jhansi vs. Ward 2(3)(1), Jhansi

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

ITA 140/AGR/2025[2019-20]Status: DisposedITAT Agra24 Jun 2025AY 2019-20

Bench: Shri Sunil Kumar Singh & Shri Manish Agarwalincome Tax Officer, Singh Carriers, Ward-2(3)(1), 2716, Swamipuram Vs. Jhansi. Colony, Gwalior Road, Jhansi, Uttar Pradesh-284003. Pan-Aacfs9607B (Appellant) (Respondent)

Section 144Section 147Section 250Section 251(1)Section 37(1)Section 69

allowable expenditure under section 37(1) - On appeal, though Commissioner (Appeals) was empowered under proviso to section 251(1) to set aside best judgment assessment, he failed to adjudicate assessee’s specific ground challenging validity of reassessment on jurisdictional ground under first proviso to section 147 - Whether ... obligatory on part of Commissioner (Appeals) to set aside all best judgment assessment orders passed under section 144 to file of Assessing Officer - Held, yes - Whether Commissioner (Appeals) instead of summarily setting aside matter to file of Assessing Officer for making a fresh assessment, ought to have taken a call

Chandrama Prasad Gupta, Kolkata vs. I.T.O., Ward - 1(2), Kolkata

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

ITA 1920/KOL/2024[2012-2013]Status: DisposedITAT Kolkata24 Jun 2025AY 2012-2013

Bench: Shri Duvvuru Rl Reddy, Vice-(Kz) & Shri Sanjay Awasthii.T.A. No. 1920/Kol/2024 Assessment Year: 2012-2013 Chandrama Prasad Gupta,………………..……Appellant 21, B.B. Ganguly Street, 2Nd Floor, Bow Bazar, Kolkata-700012 [Pan:Aeapg0167L] -Vs.- Income Tax Officer,…………………………......Respondent Ward-1(2), Kolkata, Aayakar Bhawan, P-7, Chowringhee Square, Kolkata-700069 Appearances By: Shri Suryaneel Das, A.R., Appeared On Behalf Of The Assessee Shri Subhro Das, Addl. Cit, Sr. D.R., Appeared On Behalf Of The Revenue Date Of Concluding The Hearing: June 16, 2025 Date Of Pronouncing The Order: June 24, 2025 O R D E R

Section 143(2)Section 144Section 148Section 68

respectively but the assesese did not reply to the notices issued. Therefore, ld. Assessing Officer completed the assessment as best judgment assessment under section 144 of the Act by making an addition of Rs.1,51,23,450/- under section 68 as undisclosed receipt and assessed income of the assessee