“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

Dy. Commissioner of Income Tax, Central Circle-4(1), Mumbai vs. Smt Reena Sudhir Mehta, Mumbai

The appeal of the assessee is allowed and the appeal of the revenue is dismissed

ITA 1177/MUM/2023[1993-94]Status: DisposedITAT Mumbai01 Apr 2025AY 1993-94

Bench: Shri Anikesh Banerjee, Jm & Ms Padmavathy S, Am

For Appellant: Shri Vijay Mehta, ARFor Respondent: Dr. P. Daniel (Spl. Counsel for the department), Sr. DR

Section 144Section 234ASection 249(4)Section 250

furnished a list of scrip wise dividend income totalling at Rs. 1,99,259/-, vide letter dated 01.12.2022. Considering that this is a best judgment assessment and the multiple discrepancies in the claim of the appellant, it does become imperative that the appellant's computation of dividend income

N. N. Construction, Borsi, Durg vs. Deputy Commissioner of Income Tax Circle-1(1), Bhilai, Durg

The appeal of the assessee is partly allowed for statistical purposes

ITA 403/RPR/2024[2018-19]Status: DisposedITAT Raipur28 Mar 2025AY 2018-19

Bench: Shri Partha Sarathi Chaudhury, Jm & Shri Arun Khodpia, Am आयकर अपील सं. / Ita No: 403/Rpr/2024 (िनधा"रण वष" Assessment Year: 2018-19)

For Appellant: Shri Ravi Agrawal, CAFor Respondent: Dr. Priyanka Patel, Sr. DR

Section 139(1)Section 144BSection 147Section 148Section 151ASection 250Section 44A

That, on the facts of the case and in law, the AO erred in making the estimate arbitrarily and illogically in the best judgment assessment, without reference of any comparable cases or history of the appellant's case available on record. 4. That, without prejudice to above, on the facts

Santosh Ramchandra Deulkar, Sindhudurg vs. Income Tax Officer, Kudal

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

ITA 95/PUN/2025[AY 2013-14]Status: DisposedITAT Pune28 Mar 2025

Bench: Dr.Manish Borad & Shri S.S. Viswanethra Raviआयकर अपील सं. / Ita No.95/Pun/2025 Assessment Year : 2013-14 Santosh Ramchandra Deulkar, Vs. Ito, Ward-1, 84 A, Sateli Bhedshi Bhedshi Kudal Doda Marge, Sindhudurg-416512 Pan : Awkpd5339H Appellant Respondent

For Appellant: Shri Pramod S. ShingteFor Respondent: Shri Basavaraj Hiremath

Section 144Section 147Section 148Section 68

deposits of Rs.3,00,000/-. In the absence of any explanation from the assessee’s side, the Ld. Assessing Officer proceeded to frame best judgment assessment u/s 144 r.w.s. 147 of the Act and made the addition of Rs.42,92,952/-. The assessee challenged the additions before

Balasaheb Janardan Thakur, Nashik vs. I.T.O Ward-3(1), Nashik

In the result, appeal of the assessee is partly allowed

ITA 2708/PUN/2024[2017-18]Status: DisposedITAT Pune28 Mar 2025AY 2017-18

Bench: Dr.Manish Borad & Shri Vinay Bhamoreआयकर अपील सं. / Ita No.2708/Pun/2024 िनधा"रण वष" / Assessment Year: 2017-18 Balasaheb Janardan Thakur, V The Income Tax Officer, 106, Khairgavhan, Savargaon S Ward-3(1), Nashik. Road, Yeola, Nashik-423401. Pan: Aotpt3955L Appellant/ Assessee Respondent / Revenue Assessee By Shri Pramod S Shingte – Ar Revenue By Shri Aviyogi Ambadkar – Addl.Cit Date Of Hearing 11/03/2025 Date Of Pronouncement 28/03/2025 आदेश/ Order Per Dr. Manish Borad, Am: This Is An Appeal Filed By The Assessee Against The Order Of Ld.Commissioner Of Income Tax(Appeals)[Nfac] For Assessment Year 2017-18 Dated 25.10.2024 Passed U/Sec.250 Of The Income Tax Act, 1961. 2. The Sole Grievance Of The Assessee Is That Ld.Cit(A) Erred In Confirming The Addition Of Rs.19,74,560/- Made By The Assessing Officer Under Section 69A Of The Act.

Section 142(1)Section 250Section 44ASection 69A

Demonetization period, ld.Assessing Officer(AO) issued notice under section 142(1) of the Act, but there was no response. The ld.AO proceeded for best judgment assessment. Based on the information, the Assessing Officer observed that the cash deposits in Bank other than the specified period amounting to Rs.64

Siddhivinayak Paper Industries, Nashik vs. ITO Ward 2(1) Nashik, Income Tax Offie Nashik

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

ITA 1800/PUN/2024[2017-18]Status: DisposedITAT Pune28 Mar 2025AY 2017-18

Bench: Dr.Manish Boradआयकर अपील सं. / Ita No.1800/Pun/2024 िनधा"रण वष" / Assessment Year: 2017-18 Siddhivinayak Paper Industries, V The Income Tax Officer, 18, Vastu Vinit, Jal Bhavani S Ward-2(1), Nashik. Road, Nashik Road, Nashik. Maharashtra – 422101. Pan: Abufs6973M Appellant/ Assessee Respondent / Revenue Assessee By Shri Suhas Vadulekar (Virtual) Revenue By Shri Sanjay Dhivare (Virtual) Date Of Hearing 04/02/2025 Date Of Pronouncement 28/03/2025 आदेश/ Order Per Dr. Manish Borad, Am: This Is An Appeal Filed By The Assessee Against The Order Of Ld.Commissioner Of Income Tax(Appeals)[Nfac] For Assessment Year 2017-18 Dated 11.06.2024 Passed U/Sec.250 Of The Income Tax Act, 1961. 2. The Sole Grievance Of The Assessee Is That Ld.Cit(A) Erred In Confirming The Addition Of Rs.13,60,000/- Made By The Assessing

Section 115BSection 142(1)Section 144Section 250Section 69A

requiring assessee to file the return. However, assessee failed to make any compliance. The Assessing Office, thus framed the best judgment assessment under section 144 of the Act and as per the information available about cash deposits/credits, made addition of Rs.27,98,215/- and assessed the income at the same

Vallabhbhai Jadavbhai Kalsariya, Surat vs. ITO, Ward 3(3)(5), Surat

In the result, ground No. 3 raised by the assessee is allowed

ITA 1321/SRT/2024[2017-18]Status: DisposedITAT Surat27 Mar 2025AY 2017-18

Bench: Shri Pawan Singh & Shri Bijayananda Prusethआयकर अपील सं./Ita No.1321/Srt/2024 Assessment Year: (2017-18) (Physical Court Hearing) Vallabhbhai Jadavbhai Income Tax Officer, Ward- बनाम/ Kalsariya 3(3)(5), Surat, Aaykar Bhawan, Vs. 120, Kamal Park Society, L..H. Near Majura Gate, Opp. New Road, Varachha, Surat-395 006 Civil Hospital, Surat 395 001 "थायीलेखासं./जीआइआरसं./Pan/Gir No: Bijpk 0301 G (अपीलाथ"/Appellant) (""थ" /Respondent) िनधा"रती की ओर से /Appellant By Shri Sapnesh R Sheth, Ca राज" की ओर से /Respondent By Shri Mukesh Jain, Sr-Dr सुनवाई की तारीख/Date Of Hearing 13/03/2025 उद्घोषणा की तारीख/Date Of Pronouncement 27/03/2025 आदेश / O R D E R Per Bijayananda Pruseth, Am: This Appeal By The Assessee Emanates From The Order Passed Under Section 250 Of The Income-Tax Act, 1961 (In Short, ‘The Act’) Dated 30.10.2024 By The Commissioner Of Income-Tax(Appeals)/National Faceless Appeal Centre (Nfac), Delhi [In Short ‘The Cit(A)’] For The Assessment Year (Ay) 2017-18, Which In Turn Arises Out Of Assessment Order Passed By Assessing Officer (In Short ‘Ao’) U/S 144 Of The Act Dated 05.12.2019. Grounds Of Appeal Raised By The Assessee Are As Under: “1. On The Facts & Circumstances Of The Case As Well As Law On The Subject, The Learned Commissioner Of Income Tax (Appeals), Nfac Has Erred In Confirming The Action Of Assessing Officer In Making Best Judgment Assessment U/S 144 Of The I.T. Act, 1961 Without Providing Reasonable Opportunity Of Hearing To The Assessee.

Section 115BSection 144Section 250Section 69A

subject, the learned Commissioner of Income Tax (Appeals), NFAC has erred in confirming the action of Assessing Officer in making best judgment assessment u/s 144 of the I.T. Act, 1961 without providing reasonable opportunity of hearing to the assessee. ITA No.1321/SRT/2024/AY.17-18 Vallabhbhai J Kalsariya 2. On the facts and circumstances

ACIT Circle-4(3)(1), Mumbai vs. Jmp Securities Pvt Ltd, Mumbai

In the result, the appeal filed by the revenue is dismissed and the cross objection filed by the assessee is allowed

ITA 3792/MUM/2024[2017-18]Status: DisposedITAT Mumbai27 Mar 2025AY 2017-18

Bench: Shri. Amarjit Singh, Am & Ms. Kavitha Rajagopal, Jm Acit, Circle-4(3)(1) Jmp Securities Pvt. Ltd. Aayakar Bhavan, M. K. Road, 801/806, 8Th Floor, Elite Square, 274, Churchgate, Mumbai – 400020. Vs. Perin Nariman St. Bazar Gate, Fort, Mumbai – 400001. Pan/Gir No. Aaacj8850C (Appellant) : (Respondent) C. O. No. 182/Mum/2024 (Arising Out Of Ita No. 3792/Mum/2024) (Assessment Year: 2017-18) Jmp Securities Pvt. Ltd. Acit, Circle-4(3)(1) 801/806, 8Th Floor, Elite Square, 274, Aayakar Bhavan, M. K. Road, Perin Nariman St. Bazar Gate, Fort, Vs. Churchgate, Mumbai – 400020. Mumbai – 400001. Pan/Gir No. Aaacj8850C (Appellant) : (Respondent) : Shri. Omkandalkar Assessee By Respondent By : Shri. Hemankumar Chimanlal Leuva Cit Dr. Date Of Hearing : 05.02.2025 Date Of Pronouncement : 27.03.2025 O R D E R Per Kavitha Rajagopal, J M: This Appeal Has Been Filed By The Revenue & Cross Objection Filed By The Assessee, Challenging The Order Of The Learned Commissioner Of Income Tax (Appeals) Delhi (‘Ld. Cit(A)’ For Short), National Faceless Appeal Centre (‘Nfac’ For Short)

For Respondent: Shri. Hemankumar Chimanlal Leuva

Section 147Section 148Section 151Section 151ASection 250Section 68Section 69

respectively, vide an ex parte order dated 26.05.2023, u/s. 147 r.w.s. 144 r.w.s. 144B of the Act, being the best judgment assessment, for the reason that the assessee was non-compliant throughout the assessment proceeding. 9. Aggrieved the assessee was in appeal before the first appellate authority, who vide order

Pintu Tillani, Burhanpur vs. Income Tax Officer, Burhanpur

Appeal is allowed for statistical purpose

ITA 321/IND/2024[2017-18]Status: DisposedITAT Indore26 Mar 2025AY 2017-18

Bench: Shri Bhagirath Mal Biyani & Shri Paresh M Joshiassessment Year: 2017-18

Section 142(1)Section 143(2)Section 144Section 250Section 253Section 68

explanation and therefore, Ld. AO in exercise of power conferred upon him by virtue of section 144 of the Act carried out best judgment assessment and computed total income of the assessee as Rs.70,47,470/- u/s 68 r.w.s 115BBE of the Act. That the assessment order ... well within the four corners of law. The Ld. AO has correctly invoked section 144 of the Act which speaks of best judgment assessment. The Ld. AR has failed to bring out any concrete material that Ld. AO erroneously exercised Power u/s 144. Further on 1st Appeal

Kerele Balwanth Reddy, Ranga Reddy vs. I.T.O., Ward-8(2), Hyderabad

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

ITA 43/HYD/2025[2016-17]Status: DisposedITAT Hyderabad26 Mar 2025AY 2016-17

Bench: The Tribunal. The Assessee Has Filed A Petition For Condonation Of Delay Along With An Affidavit & Explained The Reasons For Delay. Shri, S.K. Gupta, The Ld. Counsel For The Assessee Referring To The Petition Filed By The Assessee Submitted That, Although The Assessee Has Paid Appeal Fees On 5/10/2023 & Filed Relevant Form- 36 On 06/10/2023 But, Because Of Certain Errors In Digital Signature Certificate (In Short “Dsc”), The Form-36 Could Not Be Uploaded. However, The Assessee Has Obtained Dsc & Filed Digitally Signed Form- 36 On 10/01/2025 With A Delay Of 437 Days. The Said Delay Is Beyond The Control Of The Assessee. He Therefore Submitted That The Delay In Filing The Appeal Is Neither Intentional Nor For Want Of Any Undue Benefit. Therefore, In The Interest Of Justice, The Delay May Be Condoned.

Section 115BSection 139(1)Section 142(1)Section 144Section 147Section 148Section 69A

dated 11/11/2021, 14/12/2021 and 20/01/2022 were issued, but the assessee did not file any response. Therefore, the A.O passed ‘Best Judgment Assessment’ U/s. 144 of the Act and made addition of Rs. 1,93,40,000/- towards cash deposited into M/s. Sri Renuka Mata Multi State Urban Cooperative Society Limited

Kerele Balwanth Reddy, Ranga Reddy vs. ITO., Ward-1, Vikarabad

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

ITA 232/HYD/2025[2016-17]Status: DisposedITAT Hyderabad26 Mar 2025AY 2016-17

Section 115BSection 139(1)Section 142(1)Section 144Section 147Section 148Section 69A

Rajesh, Bharatpur, Rajasthan vs. ITO, WD 1, Bharatpur, Rajasthan

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

ITA 1537/JPR/2024[2015-16]Status: DisposedITAT Jaipur25 Mar 2025AY 2015-16

Bench: Shri Gagan Goyal & Shri Narinder Kumar

For Appellant: Mr. Rajesh Malhotra, CA, Ld. ARFor Respondent: Mr. Manoj Kumar, Joint CIT, Ld. DR

Section 115BSection 144Section 147Section 148Section 151Section 250Section 282Section 69A

Income Tax without complying the provisions of section 144 of the Act. The Judgment passed cannot said to be a best judgment assessment in the absence of any enquiry/ investigation on the part of ld Assessing officer. 9. BECAUSE, upon the facts and in overall circumstances of the case ... Income Tax without complying the provisions of section 144 of the Act. The Judgment passed cannot said to be a best judgment assessment in the absence of any enquiry/ investigation on the part of Ld Assessing officer. 9. BECAUSE, upon the facts and in overall circumstances of the case

Rajesh, Rajasthan vs. ITO, WD 1, Bharatpur, Rajasthan

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

ITA 1536/JPR/2024[2014-15]Status: DisposedITAT Jaipur25 Mar 2025AY 2014-15

Bench: Shri Gagan Goyal & Shri Narinder Kumar

For Appellant: Mr. Rajesh Malhotra, CA, Ld. ARFor Respondent: Mr. Manoj Kumar, Joint CIT, Ld. DR

Section 115BSection 144Section 147Section 148Section 151Section 250Section 282Section 69A

Vicky Jaikishan Bansal, Pimpari Chinchwad vs. It Officer, Akurdi

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

ITA 1862/PUN/2024[2017-18]Status: DisposedITAT Pune24 Mar 2025AY 2017-18

Bench: Shri Manish Borad & Shri Vinay Bhamoreआयकर अपील सं. / Ita No.1862/Pun/2024 िनधा"रण वष" / Assessment Year : 2017-18 Vicky Jaikishan Bansal, Vs. Ito, Ward-9(1), Pune. D24, Indraprastha Housing Society, Dehu Road, Pune- 412201. Pan : Amqpb4511P Appellant Respondent Assessee By : Shri Mahavir Jain Revenue By : Shri Aviyogi Amadkar Date Of Hearing : 10.03.2025 Date Of Pronouncement : 24.03.2025 आदेश / Order Per Manish Borad, Am: This Appeal Filed At The Instance Of Assessee Is Directed Against The Order Of Ld. Addl/Jcit(A)-3, Bengaluru [Ld. Cit(A)’] Dated 10.07.2024 Which Is Arising Out Of The Assessment Order U/S 144 Of The Act For Assessment Year 2017-18 Framed On 30.12.2019 By The Ito, Ward-9(1), Pune. 2. Apart From Various Grounds, One Ground Raised By The Assessee Is That Before He Could Make Necessary Compliance Before Ld. Cit(A) & Could File Details, The Impugned Order Was Passed.

For Appellant: Shri Mahavir JainFor Respondent: Shri Aviyogi Amadkar

Section 144

declaring income of Rs.4,06,800/-. The case selected for scrutiny for larger cash deposit and thereafter Ld. Assessing Officer passed best judgment assessment by making addition of Rs.21,99,406/- by applying 1% rate of net profit on 50% of the undisclosed turnover allegedly on account of money transfer

Jayanta Khaund, Guwahati vs. ACIT Cir-1, Guwahati

In the result, the appeals filed by the assessee in ITA Nos

ITA 223/GTY/2024[2018-19]Status: DisposedITAT Guwahati21 Mar 2025AY 2018-19

Bench: Shri Manomohan Das & Shri Rakesh Mishra

Section 148Section 250Section 270ASection 271ASection 68

thereafter pass a speaking order and in case the assessee fails to furnish any evidence, he shall be at liberty to make a best judgment assessment on the facts of the case and in accordance with law. This is imperative since on the basis of the findings