“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

Farhat Khatun, Chhoti Khagul vs. CIT Appeal, Income Tax

Appeal is allowed for statistical purpose

ITA 493/IND/2024[2017-18]Status: DisposedITAT Indore21 Mar 2025AY 2017-18

Bench: Shri B.M. Biyani

Section 115BSection 133(6)Section 142(1)Section 144Section 69A

IN THE INCOME TAX APPELLATE TRIBUNAL INDORE BENCH, INDORE BEFORE SHRI B.M. BIYANI, ACCOUNTANT MEMBER AND SHRI PARESH M. JOSHI

Avinash Pandurang Pawar, Ahemednagar vs. NFAC, Delhi, Not Available

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

ITA 2544/PUN/2024[2018-19]Status: DisposedITAT Pune21 Mar 2025AY 2018-19

Bench: Dr.Manish Borad & Shri S.S.Viswanethra Raviआयकर अपील सं. / Ita No.2544/Pun/2024 Assessment Year : 2018-19

For Appellant: NoneFor Respondent: Shri Manoj Tripathi

Section 144Section 147Section 250Section 69Section 69A

purchase of flat at Rs.21,12,421/-. Before AO, assessee could not plead by filing the necessary submissions resulting into best judgment assessment u/s.144 of the Act. Even before ld.CIT(A) except filing of appeal, assessee could not file any evidence in support of his case. Before us, assessee

Mirsabmiya Divanmiya Saiyad, Mehsana vs. The ITO, Ward-5, Mehsana

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

ITA 23/AHD/2025[2015-16]Status: DisposedITAT Ahmedabad20 Mar 2025AY 2015-16

Bench: Shri Sanjay Gargassessment Year 2015-16

For Appellant: Shri Anil Kshtriya, A.RFor Respondent: Shri Ashok Kumar Suthar, Sr. D.R

Section 147

THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD “SMC” BENCH Before Shri Sanjay Garg, Judicial Member Assessment Year 2015-16 Mirsabmiya The

Avish Jugalkishore Atal, Akola vs. Deputy Commissioner of Income Tax - Central Circle 6(1), Mumbai

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

ITA 702/MUM/2025[2012-13]Status: DisposedITAT Mumbai20 Mar 2025AY 2012-13

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

For Appellant: Shri. Dharan GandhiFor Respondent: Shri. Ram Krishn Kedia, (SR. DR.)

Section 144Section 148Section 250

passed the assessment order u/s. 144 r.w.s. 147 of the Act, dated 21.12.2017, being the best judgment assessment, determining total income at Rs. 1,55,39,470/-, after making an addition on bogus purchases amounting to Rs.1,28,80,000/- and disallowance of brokerage of Rs. 1,20,000/-, pertaining

Ujwala Mahila Mutually Aided Co-Op Thrift and Credit Society Limited, Gannavaram vs. Income Tax Officer, Ward-3(1), Vijayawada

In the result, ITA.No.314/VIZ

ITA 314/VIZ/2024[2019-20]Status: DisposedITAT Visakhapatnam19 Mar 2025AY 2019-20

Bench: Shri Manjunatha G & Shri K. Narasimha Chary

For Appellant: Shri S. Rama RaoFor Respondent: Dr. Aparna Villuri, Sr. AR

Section 139(1)Section 142(1)Section 147Section 148Section 151Section 80ASection 80P

explain the source for cash deposit into bank account. Since the assessee has failed to file relevant evidences, the Assessing Officer has passed best Judgment assessment order u/sec.147 r.w.s.144 of the Act dated 14.03.2024 and determined the total income of the assessee at Rs.10,88,532/- by making addition

Ujwala Mahila Mutually Aided Co-Op Thrift and Credit Society, Gannavaram vs. Income Tax Officer, Ward-3(1), Vijayawada

In the result, ITA.No.314/VIZ

ITA 313/VIZ/2024[2018-19]Status: DisposedITAT Visakhapatnam19 Mar 2025AY 2018-19

Bench: Shri Manjunatha G & Shri K. Narasimha Chary

For Appellant: Shri S. Rama RaoFor Respondent: Dr. Aparna Villuri, Sr. AR

Section 139(1)Section 142(1)Section 147Section 148Section 151Section 80ASection 80P

Vishal Vasudevbhai Modi, Ahmedabad vs. The Income Tax Officer, Ward-1(3)(5), Ahmedabad

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

ITA 910/AHD/2023[2017-18]Status: DisposedITAT Ahmedabad19 Mar 2025AY 2017-18

Bench: Shri Siddhartha Nautiyal & Shri Makarand V. Mahadeokarआयकर अपील सं /Ita No.910/Ahd/2023 िनधा"रण वष" /Assessment Year : 2017-18 Vishal Vasudevbhai Modi The Income Tax Officer बनाम/ 128/3, Golwad Ward-1(3)(5) V/S. Ratanpole, Kalupur Ahmedabad – 380 015 Ahmedabaed – 380 0015 (Gujarat) "थायी लेखा सं./Pan: Anopm 0228 K (अपीलाथ&/ Appellant) ('( यथ&/ Respondent) Assessee By : Shri P.F. Jain, Ar Revenue By : Shri Prathvi Raj Meena, Cit-Dr सुनवाई की तारीख/Date Of Hearing : 13 /03/2025 घोषणा की तारीख /Date Of Pronouncement: 19 /03/2025 आदेश/O R D E R Per Makarand V. Mahadeokar, Am:

For Appellant: Shri P.F. Jain, ARFor Respondent: Shri Prathvi Raj Meena, CIT-DR

Section 115BSection 133(6)Section 142(1)Section 144Section 173Section 69A

05/08/2019, and 26/11/2019, seeking an explanation for the deposits. However, the assessee failed to respond to these notices, and the AO proceeded with best judgment assessment under Section 144 of the Act. The AO issued notices under Section 133(6) of the Act on 18/06/2019 to the banks, where

Javed Rasool Shaikh, Thane vs. Income Tax Officer Ward 1(1), Thane

ITA 273/MUM/2025[2022-23]Status: DisposedITAT Mumbai18 Mar 2025AY 2022-23

Bench: S/Shir Anikesh Banerjee (Jm) & Omkareshwar Chidara (Am) Javed Rasool Shaikh Ito Ward 1(1) B-22, Milan Apartment Qureshi Mansion K Villa, Rabodi, Thane Vs. Gokhale Road West, Maha-400 601. Thane, Mah.-400602. Pan : Blsps5324M Appellant Respondent

For Appellant: Ms. Kavitha KaushikFor Respondent: Shri Vipul Shah

Section 143(2)Section 144Section 44A

case and in law the learned CIT(A) erred in upholding the action of the Assessing Officer in concluding that a best judgment assessment was necessary solely based on the non- furnishing of certain documents without properly considering the appellant's explanations regarding the non-applicability of provisions of Section

Ladulal Harakcand Kanther, Mumbai vs. ITO Ward 28(2)(1), Mumbai

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

ITA 572/MUM/2025[2017-18]Status: DisposedITAT Mumbai17 Mar 2025AY 2017-18

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

For Appellant: Shri. Bhavesh P. RakholiyaFor Respondent: 12.03.2025

Section 142(1)Section 144Section 250Section 44ASection 68Section 69A

Assessing Officer (ld. A.O. for short) passed the assessment order u/s. 144 of the Act, vide order dated 26.11.2019 being the best judgment assessment, for the reason that the assessee was non-compliant during the assessment proceedings and determined the total income at Rs. 81,28,815/- after making

Amina Nathu Shaikh, Mumbai vs. Income Tax Officer-26(1)-1, Mumbai

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

ITA 543/MUM/2025[2017-18]Status: DisposedITAT Mumbai17 Mar 2025AY 2017-18

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

For Appellant: Ms. Rupal ShrimalFor Respondent: 11.03.2025

Section 133(6)Section 142(1)Section 144Section 250Section 68

demonetization and post-demonetization period. The ld. AO passed the assessment order u/s. 144 of the Act, vide order dated 29.06.2019 being the best judgment assessment for the reason that the assessee was non-compliant during the assessment proceedings and determined the total income

Ramakrishna Housingg, Vijayawada vs. Income Tax Officer, Ward-2(1), Vijayawada

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

ITA 515/VIZ/2024[2022-23]Status: DisposedITAT Visakhapatnam13 Mar 2025AY 2022-23

Bench: Shri Manjunatha G. & Shri K. Narasimha Charyआ.अपी.सं /Ita No.515/Viz/2024 (निर्धारण वर्ा/Assessment Year: 2022-23) Ramakrishna Housingg Vs. Income Tax Officer Vijayawada Ward-2(1) [Pan : Aasfr5923P] Vijayawada (Appellant) (Respondent) निर्धाररती द्वधरध/Assessee By: Shri B.Srinivasa Rao & Ors. रधजस् व द्वधरध/Revenue By:: Dr.Satyasai Rath, Cit(Dr) सुिवधई की तधरीख/Date Of Hearing: 11/03/2025 घोर्णध की तधरीख/Date Of 13/03/2025 Pronouncement: आदेश / Order Per. Manjunatha G., A.M: This Appeal Filed By The Assessee Is Directed Against The Order Dated 22.11.2024 Of The Learned Commissioner Of Income Tax (Appeals) [Learned Cit(A)], National Faceless Appeal Centre (Nfac), Delhi, Relating To A.Y.2022-23. 2. The Brief Facts Of The Case Are That The Assessee Is A Partnership Firm, Engaged In The Business Of Real Estate Development, Filed Its Return Of Income For The A.Y.2022-23 On 31.12.2022, Declaring Loss Of Rs.1,28,297/-. The Case Was Selected For Scrutiny & During The Course Of Assessment Proceedings, The 2 Ramakrishna Housingg Assessing Officer (“The Ao”) Issued Notice U/S 142(1) & 143(2) Of The Income Tax Act, 1961 (In Short “Act”) On Various Dates & Called Upon The Assessee To File Relevant Evidences, In Support Of Return Of Income Filed For The Year Under Consideration. The Assessee Neither Appeared, Nor Filed Any Evidences, Therefore, The Ao Issued Show Cause Notice & Called Upon The Assessee To Explain, As To Why The Assessment Proceedings Shall Not Be Completed In Terms Of Section 144 Of The Act. Once Again, The Assessee Did Not Furnish Any Details As Called For By The Ao. Therefore, The Ao Passed Ex-Parte Best Judgment Assessment Order U/S 144 Of The Act On 05.03.2024 & Determined Total Income At Rs.61,64,11,609/- By Making Various Additions To The Returned Loss.

For Appellant: Shri B.Srinivasa Rao & OrsFor Respondent: : Dr.Satyasai Rath, CIT(DR)

Section 142(1)Section 144

Once again, the assessee did not furnish any details as called for by the AO. Therefore, the AO passed ex-parte best judgment assessment order u/s 144 of the Act on 05.03.2024 and determined total income at Rs.61,64,11,609/- by making various additions to the returned loss

Jamilhusen Abdullatif Vijapura, Sabarkantha vs. The ITO, S.K. Ward-3, Himatnagar

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

ITA 100/AHD/2025[2012-13]Status: DisposedITAT Ahmedabad13 Mar 2025AY 2012-13

Bench: Shri Siddhartha Nautiyal & Shri Makarand V. Mahadeokarआयकर अपील सं /Ita No.100/Ahd/2025 िनधा"रण वष" /Assessment Year : 2012-13 Jamilhusen Abdullatif The Ito बनाम/ Vijapura S.K. Ward-3 V/S. At Lalpur, Po Savgadh, Himatnagar – 383 001 Himatnagar – 383 001 (Gujarat) Sabarkantha (Gujarat) "थायी लेखा सं./Pan: Ahepv 6442 J (अपीलाथ%/ Appellant) (&' यथ%/ Respondent) Assessee By : Shri Varis Isani, Advocate Revenue By : Shri Rignesh Das, Sr. Dr सुनवाई की तारीख/Date Of Hearing : 11 /03/2025 घोषणा की तारीख /Date Of Pronouncement: 13 /03/2025 आदेश/O R D E R Per Makarand V. Mahadeokar, Am:

For Appellant: Shri Varis Isani, AdvocateFor Respondent: Shri Rignesh Das, Sr. DR

Section 144Section 147Section 148Section 250Section 69A

notices issued under Sections 148, 142(1), and 144 of the Act during the course of assessment proceedings. Consequently, the AO framed a best judgment assessment under Section 144 of the Act. 3. The CIT(A), upheld the assessment order, dismissing the appeal of the assessee without adjudicating on merits

Nihal Industries Private Limited, Ahmedabad vs. Income Tax Officer, Ward 3(1)(1), Ahmedabad

The appeal of the assessee is partly allowed

ITA 1488/AHD/2024[A.Y. 2014-15]Status: DisposedITAT Ahmedabad12 Mar 2025

Bench: Shri Siddhartha Nautiyal & Shri Makarand V. Mahadeokarआयकर अपील सं /Ita No.1488/Ahd/2024 िनधा"रण वष" /Assessment Year : 2014-15 Nihal Industries Private The Income Tax Officer बनाम/ Limited Ward-3(1)(1) V/S. 1961, Above Royal Cycle Ahmedabad Inside Panchkuwa Panchkuwa Ahmedabad – 380 001 "थायी लेखा सं./Pan: Aadcn 7129 D (अपीलाथ&/ Appellant) ('( यथ&/ Respondent) Assessee By : Shri Arjav D. Vidani, Ar Revenue By : Ms. Ketaki Desai, Sr.Dr सुनवाई की तारीख/Date Of Hearing : 11 /03/2025 घोषणा की तारीख /Date Of Pronouncement: 12 /03/2025 आदेश/O R D E R Per Makarand V. Mahadeokar, Am: This Appeal By The Assessee Is Directed Against The Order Of The Learned Commissioner Of Income Tax (Appeals)-Nfac, Delhi [Hereinafter Referred To As “Cit(A)”], Dated 21.06.2024, Confirming The Penalty Of Rs.30,000/- Levied By The Assessing Officer [Hereinafter Referred To As “Ao”] Under Section 271(1)(B) Of The Income Tax Act, 1961 [Hereinafter Referred To As “The Act”] For Assessment Year (Ay) 2014-15. Nihal Industries Pvt.Ltd. Vs. Ito Asst. Year : 2014-15

For Appellant: Shri Arjav D. Vidani, ARFor Respondent: Ms. Ketaki Desai, Sr.DR

Section 142(1)Section 144Section 147Section 148Section 271(1)(b)

arises from the same cause. It was further observed that in such cases, the appropriate remedy for non-compliance is the completion of best judgment assessment under Section 144 of the Act, rather than imposing multiple penalties. 7.3. Following the rationale laid down in the case of Rekha Rani (supra

Kailash Chand, Jaipur vs. ITO Ward, Behror

In the result, the appeal of the assessee is allowed

ITA 565/JPR/2024[2012-13]Status: DisposedITAT Jaipur10 Mar 2025AY 2012-13

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

For Appellant: Sh. Mahendra Gargieya, Adv. &For Respondent: Sh. Dinesh Badgujar, Addl. CIT

Section 142(1)Section 144Section 144BSection 147Section 148Section 234A

Naagaon v/s ITO (2012) 32 CCH 103 (Del). General Submissions on Merits: For all the grounds: 2. The impugned assessment is not a best judgment assessment as contemplated by law: 2.1 It is submitted that the AO also did not meet with the requirements of making a “best judgment assessment ... kindly be made to the commentary by the ld. Authors Chaturvedi Pethisaria Vol. 3 Edition V at page 4932, reproduced hereunder verbatim:- “Best Judgment assessment – how to be made? – In making a best judgment assessment the Assessing Officer must not act dishonestly or vindictively or capriciously because he must exercise

Usha Rani Chebrolu, Guntur vs. Income-Tax Officer, Ward-2(1), Guntur

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

ITA 532/VIZ/2024[2015-16]Status: DisposedITAT Visakhapatnam07 Mar 2025AY 2015-16

Bench: Shrik Narasimha Chary, Hon’Ble & Shri S Balakrishnan, Hon’Ble(Hybrid Hearing) आयकर अपीलसं./ I.T.A.532/Viz/2024 (ननधधारण वर्ा/ Assessment Year: 2015-16) Usha Rani Chebrolu, Vs. Income Tax Officer, Guntur. Ward-2(1), Pan: Abmpc8555B Guntur. (अपीलधथी/ Appellant) (प्रत्यथी/ Respondent) अपीलधथी की ओर से/ Assessee By : Sri I. Kama Sastry, Ar प्रत्यधथी की ओर से/ Revenue By : Dr. Aparna Villuri, Sr. Ar

For Appellant: Sri I. Kama Sastry, ARFor Respondent: Dr. Aparna Villuri, Sr. AR

Section 144Section 147Section 148Section 148ASection 149(1)(b)Section 56Section 69A

email/ speed post. Therefore, considering the assessee’s non-compliance / no response to the notices issued, the Ld. AO concluded the assessment as best judgment assessment by invoking the provisions of section 144 of the Act. Thus, in the assessment order passed U/s. 144 r.w.s 147 r.w.s 144B

Shailendra Garg, Sriganganagar vs. Deputy Commissioner of Income Tax Circle 6, Jaipur

In the result, the appeals of the assesseeare allowed for statistical purposes as indicated hereinabove

ITA 8/JPR/2025[2011-12]Status: DisposedITAT Jaipur07 Mar 2025AY 2011-12