“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

Tejender Pal Singh Sahni, Kota vs. Deputy Commissioner of Income Tax, Central Circle, Kota

In the result ITA No. 1147/JP/2024 (A

ITA 1147/JPR/2024[2014-15]Status: DisposedITAT Jaipur10 Jan 2025AY 2014-15

Bench: Dr. S. Seethalakshmi & Shri Gagan Goyal

For Appellant: Mr. C. M. Birla, CA, Ld. ARFor Respondent: Mr. Gautam Singh Choudhary, JCIT, Ld. DR

Section 139Section 143(2)Section 144Section 153(3)Section 153ASection 250Section 69Section 80C

That as Assessment Order is made u/s. 144 of the Act we feel appropriate to reproduce section 144 which reads as under- 144 Best judgment assessments [(1) If any person- (a) Fails to make the return required (under sub-section (1) of section 139 and has not made a return

Meena Jewellers Extension Private Limited, Hyderabad vs. ACIT, Circle-5(1), Hyderabad

In the result, appeal filed by the assessee in ITA

ITA 385/HYD/2024[2017-18]Status: DisposedITAT Hyderabad10 Jan 2025AY 2017-18

Bench: Shri Vijay Pal Rao & Shri Manjunatha G.आ.अपी.सं /Ita No.328/Hyd/2024 To 330/Hyd/2024 & Ita 385/Hyd/2024 (निर्धारण वर्ा/Assessment Year: 2017-18 & 2018-19) M/S Meena Jewellers Vs. Acit, Circle-5(1) / Extension Private Limited Circle-16(2) Hyderabad Hyderabad [Pan :Aaicm3013G]

For Appellant: Shri P.Murali Mohan RaoFor Respondent: Shri M.Vijay Kumar, CIT-DR

Section 144Section 250Section 68Section 69A

before the Assessing Officer are ex-parte. The assessee neither appeared nor filed any details, therefore, we cannot find any fault with the best judgment assessment order passed by the Assessing Officer. Further, the assessee could not file any details before the Ld.CIT(A). Even though the assessee claims that ... compliance from the assessee. The assessee neither appeared nor filed any details to explain its case, therefore, we cannot find fault with the best judgment assessment order passed by the Assessing Officer u/s 144 of the Act and various additions made in the assessment proceedings. Further, although the assessee

Meena Jewellers Extension Private Limited, Hyderabad vs. ACIT, Circle-5(1), Hyderabad

In the result, appeal filed by the assessee in ITA

ITA 330/HYD/2024[2018-19]Status: DisposedITAT Hyderabad10 Jan 2025AY 2018-19

For Appellant: Shri P.Murali Mohan RaoFor Respondent: Shri M.Vijay Kumar, CIT-DR

Section 144Section 250Section 68Section 69A

Meena Jewellers Extension Private Limited, Hyderabad vs. ACIT, Circle-16(2), Hyderabad

In the result, appeal filed by the assessee in ITA

ITA 329/HYD/2024[2017-18]Status: DisposedITAT Hyderabad10 Jan 2025AY 2017-18

For Appellant: Shri P.Murali Mohan RaoFor Respondent: Shri M.Vijay Kumar, CIT-DR

Section 144Section 250Section 68Section 69A

Meena Jewellers Extension Private Limited, Hyderabad vs. ACIT, Circle-16(2), Hyderabd

In the result, appeal filed by the assessee in ITA

ITA 328/HYD/2024[2017-18]Status: DisposedITAT Hyderabad10 Jan 2025AY 2017-18

For Appellant: Shri P.Murali Mohan RaoFor Respondent: Shri M.Vijay Kumar, CIT-DR

Section 144Section 250Section 68Section 69A

Jagvir Singh Kuntal, Mathura vs. Income Tax Officer, Ward-1(3)(2), Mathura

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

ITA 68/AGR/2024[2017-18]Status: DisposedITAT Agra09 Jan 2025AY 2017-18

Bench: : Shri Ramit Kocharassessment Year: 2017-18

Section 143(2)Section 144Section 253(3)Section 69A

decide the appeal on merits. I order accordingly. 5. On merits, ld. Counsel at the outset submitted that the Assessing Officer has passed best judgment assessment u/s. 144 of the Act. Notices u/s. 143(2) and 142(1) were issued by the Assessing 4 | P a g e Officer during

Bhogibhai Vithalbhai Patel, Mehsana vs. The ACIT, Circle-Gandhinagar, Gandhinagar

In the result, the appeal of the assessee is allowed, and the impugned

ITA 1824/AHD/2024[2017-18]Status: DisposedITAT Ahmedabad08 Jan 2025AY 2017-18

For Appellant: Shri Anil Kshatriya andFor Respondent: Shri Nitin Kulkarni, Sr.DR

Section 142(1)Section 143(2)Section 272ASection 272A(1)(d)Section 273BSection 68

assessee for furnishing additional information. As the assessee allegedly failed to comply with the notices, the AO proceeded to make a best judgment assessment u/ s.144 of the Act on 12.12.2019, making an addition of Rs.19,00,000/- under Section 68 of the Act for unexplained cash deposits. Thereafter

Arumugam Latha, Chennai vs. ITO, Ncw-9(3), Chennai

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

ITA 2352/CHNY/2024[2017-18]Status: DisposedITAT Chennai08 Jan 2025AY 2017-18

Bench: Shri Aby T. Varkey & Shri Jagadish

For Appellant: Mr. Girish Kumar, Advocate

Section 139(1)Section 144Section 250Section 6

issued notice to the assessee and finding no reply, he sent a notice to inform her about his desire to pass a best judgment assessment. In response to the same, the Ld.AR of the assessee appeared and filed the details of the credits in the bank account amounting to Rs.54

Lanco Rithwik Joint Venture, Hyderabad vs. Income Tax Officer, Ward-14(1), Hyderabad

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

ITA 897/HYD/2024[2018-19]Status: DisposedITAT Hyderabad08 Jan 2025AY 2018-19

Bench: Shri Manjunatha G & Shri Ravish Sood

For Appellant: Sri Mohd. Afzal, AdvocateFor Respondent: Sri Madan Mohan Meena,Sr. AR

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

determined the total income of the assessee at Rs.65,55,000/- by making addition u/sec.69A of the Act as unexplained money vide his best Judgment assessment order dated 14.03.2022. 3 ITA.No.897/Hyd./2025 3. Aggrieved by the assessment order, the assessee preferred appeal before the learned CIT(A). The learned ... Officer based on the material available on record, made impugned addition Rs.65,55,000/- as unexplained money u/sec.69A of the Act and passed best Judgment assessment order u/sec.144 of the Act. During the course of appellate proceedings before the learned CIT(A), although, the learned CIT(A) has issued notices

DCIT, Ghaziabad vs. M/S. Devidayal Aluminium Industries Pvt. Ltd., Ghaziabad

ITA 4297/DEL/2016[2013-14]Status: DisposedITAT Delhi08 Jan 2025AY 2013-14

Bench: Shri Satbeer Singh Godara & Shri S Rifaur Rahman, Accountnat Member

bear in mind the clear distinction which exists between an assessment under Section 153C, a scrutiny assessment under Section 143(3), a best judgment assessment under Section 144 and assessment or reassessment of escaped assessment under Section 147. According to learned counsels, the assessment under Section 153C is a special

Prakash Dipchand Kapadnis, Nashik vs. ITO Ward 1(1), Nashik

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

ITA 2429/PUN/2024[2013-14]Status: DisposedITAT Pune07 Jan 2025AY 2013-14

Bench: Dr.Manish Boradआयकर अपील सं. / Ita No.2429/Pun/2024 Assessment Year : 2013-14

For Appellant: NoneFor Respondent: Shri Vinod Pawar

Section 139(1)Section 144Section 147Section 148Section 250Section 250(6)

return of income and reply to the notice u/s.148 of the Act, the Assessing Officer had no option except to frame the best judgment assessment u/s.144 of the Act making addition of total receipt of Commission/Brokerage of Rs.24,89,121/-. 3. Aggrieved assessee preferred appeal before the ld.NFAC apart from

Mohd. Saleem Gulam Rasool Qureshi, Lucknow vs. Jt. Commissioner of Income Tax-V, Lucknow

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

ITA 224/LKW/2017[2011-12]Status: DisposedITAT Lucknow03 Jan 2025AY 2011-12

Bench: Shri Anadee Nath Misshra & Shri Subhash Malguria

Section 120(4)Section 127Section 143(3)Section 144Section 145(3)

Assessing Officer and the income of the assessee ought to have been assessed on the basis of books of account and not best judgment assessment.” 3. The facts of the case, in brief, are that for the assessment year 2011- 12 i.e. the year under consideration, the assessee filed

M/S Gujarat Enterprises, Mumbai Suburban vs. Income Tax Officer-32(1)(5), Mumbai

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

ITA 4203/MUM/2023[2007-08]Status: DisposedITAT Mumbai01 Jan 2025AY 2007-08

Bench: Hon’Ble Shri Sandeep Gosain & Shri Girish Agrawalchandarkishore Vs. Ito, Ward 42(2)(1) Nandkishore Seksaria Kautilya Bhawan, Bkc 70, Seksaria House, Jb Bandra (E) – 400 051. Nagar, Andheri (E), Mumbai – 400 059. Pan/Gir No. Amxps4815N (Applicant) (Respondent)

Section 142(1)Section 144Section 148Section 250Section 270A

notice dated 22.03.2022. In response, the Authorized Representative filed reply on 23.03.2022 with necessary justifications. f. Despite these submissions, the AO passed a best judgment assessment under section 144 on 25.03.2022, alleging that the Appellant had been non-responsive. 3. Aggrieved, the Appellant preferred appeal before

Vicky Prasad Shaw, Howrah vs. ITO, Ward - 47(2), Kolkata

In the result, both the appeals of the assessee are treated as allowed for statistical purposes

ITA 2142/KOL/2024[2014-15]Status: DisposedITAT Kolkata31 Dec 2024AY 2014-15

Bench: Shri Sanjay Garg & Shri Rakesh Mishra

Section 144Section 147Section 250Section 271(1)(c)

आयकर अपीलीय अिधकरण, कोलकाता पीठ ‘C’, कोलकाता IN THE INCOME TAX APPELLATE TRIBUNAL “C” BENCH KOLKATA Before Shri Sanjay Garg

Vicky Prasad Shaw, Howrah vs. ITO, Ward - 47(2), Kolkata

In the result, both the appeals of the assessee are treated as allowed for statistical purposes

ITA 2141/KOL/2024[2014-15]Status: DisposedITAT Kolkata31 Dec 2024AY 2014-15

Bench: Shri Sanjay Garg & Shri Rakesh Mishra

Section 144Section 147Section 250Section 271(1)(c)

आयकर अपीलीय अिधकरण, कोलकाता पीठ ‘C’, कोलकाता IN THE INCOME TAX APPELLATE TRIBUNAL “C” BENCH KOLKATA Before Shri Sanjay Garg

Chittaranjan Ghosh, Nadia vs. ITO, Ward-41(1), Nadia.

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

ITA 1312/KOL/2023[2014-15]Status: DisposedITAT Kolkata31 Dec 2024AY 2014-15

Bench: Shri Sanjay Garg & Shri Rakesh Mishra

Section 250

आयकर अपीलीय अिधकरण, कोलकाता पीठ ‘C’, कोलकाता IN THE INCOME TAX APPELLATE TRIBUNAL “C” BENCH KOLKATA Before Shri Sanjay Garg

M/S. Bhiwandi Nzampur Nagarpalika Collage, Mumbai vs. ITO Ward 1(1), Kalyan

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

ITA 4242/MUM/2024[2018-19]Status: DisposedITAT Mumbai31 Dec 2024AY 2018-19

Bench: Shri. Om Prakash Kant, Am & Ms. Kavitha Rajagopal, Jm M/S. Bhiwandi Nizampur Assessing Officer, Ward 1(1), Nagarpalika College Mohan Plaza, Katak Pada, Kalyan, 1, Dhamankar Naka, Bhiwandi, Vs. Dist. Thane – 421301. Vidyashram, S. O. Thane – 421305. Pan/Gir No. Aaaab1757C (Assessee) : (Respondent) Assessee By : Shri. H. N. Motiwalla Respondent By : Mr. Tushar Mohite, Sr. Dr Date Of Hearing : 17.10.2024 Date Of Pronouncement : 31.12.2024 O R D E R Per Kavitha Rajagopal, J M: This Appeal Has Been 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) Passed U/S.250 Of The Income Tax Act, 1961 (‘The Act'), Pertaining To The Assessment Year (‘A.Y.’ For Short) 2018-19. 2. The Assessee Has Raised The Following Grounds Of Appeal: “1. On The Facts & In The Circumstances Of The Case, The Learned Commissioner Of Income Tax (Appeals), National Faceless Appeal Centre (Nfac), Delhi, Erred In Dismissing The Appeal Only On The Ground That The Appellant Has Not Made Payment Equal To Advance Tax Which Was Due On Its Income Without Appreciating The Fact That The Appellant Is A College Affiliated To University Of Mumbai Under The Management Of Padmashri Annasahib Jadhav Bhartiya Samaj Unnati Mandal (Trust) Bhiwandi Assessed Under Pan Aaatp2888P. 2. On The Facts & In The Circumstances Of The Case The Said Learned Commissioner Of Income Tax Has Also Erred In Not Considering The Ground That The Assessing Officer, Assessment Unit, Income Tax Department Has Erred In Estimating @ 8% On College Fee Receipt Of Rs. 1,63,75,639/- I.E. Rs. 13,10,051/- As Business Receipt Without Appreciating

For Appellant: Shri. H. N. MotiwallaFor Respondent: Mr. Tushar Mohite, Sr. DR

Section 147Section 148Section 249(4)(b)Section 250

assessment proceeding. The ld. AO then passed the assessment order u/s. 147 r.w. 144 r.w.s. 144B of the Act dated 15.03.2023, being the best judgment assessment, thereby determining total income at Rs. 13,10,051/- towards the net profit @ 8% on the total deposits by treating the same as business

Rahul Kumar Singh, Ghansoli, Navi-Mumbai vs. Assessing Officer Income Tax Department Ward 28(2)(1), Mumbai, Vashi, Navi-Mumbai

ITA 3112/MUM/2024[2018-19]Status: DisposedITAT Mumbai31 Dec 2024AY 2018-19

For Appellant: Shri Mohan Tandon, ARFor Respondent: Shri Manoj Kumar, Sr. DR

Section 133(6)Section 143(2)Section 144Section 148Section 148ASection 69Section 69A

statutory notices issued. In view of the same, the AO has completed the assessment under section 144 of the Act which deals with best judgment assessment. Accordingly the AO has made an addition under section 69 of the Act to the extent of Rs. 37.83 lakhs. 3. Aggrieved

Deputy Commissioner of Income Tax, Central Circle-II, Noida vs. Pacific Mining Products Pvt. Ltd., Delhi

Appeal is allowed for statistical purposes”

ITA 1983/DEL/2024[2012-13]Status: DisposedITAT Delhi27 Dec 2024AY 2012-13

Bench: Shri S Rifaur Rahman & Shri Sudhir Kumarita No.1983/Del/2024 Assessment Year- 2012-13 Ita No.1984/Del/2024 Assessment Year- 2013-14 Ita No.1985/Del/2024 Assessment Year- 2014-15 Ita No.1986/Del/2024 Assessment Year- 2015-16

For Appellant: N o n eFor Respondent: Shri Sumer Singh Meena, CIT DR

date of compliance was fixed on 12/06/2017. Simultaneously, a letter was written dated 03/07/2017 to the assessee to show cause as to why best judgment assessment under Section 144 of the Act may not be made in its case since the assessee has failed to cooperate & comply to the directions ... cooperative attitude of the assessee & failure to comply with the Direction under section 142(2A) to get the accounts audited entails a best judgment assessment under section 144 of the Act. In the given circumstances, there is no other alternative than to complete the assessment order ex-parte

Nurunnesha Sardar, Howrah vs. ITO, 47(2), Kolkata

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

ITA 98/KOL/2024[2017-18]Status: DisposedITAT Kolkata20 Dec 2024AY 2017-18

Bench: Sonjoy Sarma & Sri Rakesh Mishra

Section 144Section 250

were not filed before the Ld. AO nor even before the Ld. CIT(A). It is a settled principle that even in the best judgment assessment, the income has to be assessed to the best of judgment. Since these documents have been filed for the first time before the Tribunal