“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

Medisetty Venkata Rattaiah, Vijayawada vs. The Assistant Or Deputy Commissioner of Income Tax, Vijayawada

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

ITA 94/VIZ/2024[2017-18]Status: DisposedITAT Visakhapatnam18 Apr 2024AY 2017-18

Bench: Shri Duvvuru Rl Reddy, Hon’Ble & Shri S Balakrishnan, Hon’Ble(Through Hybrid Hearing) आयकरअपीलसं./ I.T.A. No.94/Viz/2024 (निर्धारणवर्ा/ Assessment Year : 2017-18) Medisetty Venkata Rattaiah, Vs. The Assistant Or Deputy Vijayawada. Commissioner Of Income Tax, Pan: Abypm 1595 M Vijayawada. (अपीलधर्थी/ Appellant) (प्रत्यर्थी/ Respondent) अपीलधर्थीकीओरसे/ Assessee By : Sri M.V. Prasad, Ar प्रत्यधर्थीकीओरसे/ Revenue By : Dr. Satyasai Rath, Cit-Dr

For Appellant: Sri M.V. Prasad, ARFor Respondent: Dr. Satyasai Rath, CIT-DR

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

during the year. Since there was no response from the assessee, the Ld. AO completed the assessment U/s. 144 of the Act as best judgment assessment wherein the Ld. AO made certain additions aggregating to Rs. 5,40,21,666/- [Addition

Lokesh Ghiya, Nagda vs. Income Tax Officer, Ujjain

In the result, appeal of the assessee is partly allowed

ITA 504/IND/2023[2012-13]Status: DisposedITAT Indore16 Apr 2024AY 2012-13

Bench: Shri Vijay Pal Rao & Shri B.M. Biyanilokesh Ghiya Ito 27, Government Colony Nagda Ujjain Vs. M.P. (Appellant / Assessee) (Respondent/ Revenue) Pan: Aoipg2695D Assessee By Shri Amit Choudhary Ar Revenue By Shri Ashish Porwal, Sr. Dr Date Of Hearing 09.04.2024 Date Of Pronouncement 16.04.2024

Section 139Section 144Section 147Section 148Section 44A

account to the tune of Rs.16,76,570/- was furnished by the assessee. Therefore, the AO was having no option but to frame best judgment assessment u/s 144 r.w. section 147 of the Act. It is not the case that the assessee has filed a return of income declaring business

Mukesh B. Bajaj, Mumbai vs. Commissioner of Income Tax/Income Tax Officer /National E-Assessment Centre.Delhi, Mumbai

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

ITA 3910/MUM/2023[2012-13]Status: DisposedITAT Mumbai16 Apr 2024AY 2012-13

Bench: Shri Pavan Kumar Gadale & Ms. Padmavathy Smukesh.B.Bajaj, Vs Ito-28(2)(2), Flat No. A-302, Vashi, Saibaba, Arcade, Navi Mumbai-400703. Sector-11, Vashi Navi Mumbai-400703. Pan/Gir No. : Aempb1761K Appellant .. Respondent

For Appellant: Shri. Fenil Bhatt.ARFor Respondent: Shri R.R. Makwana.DR

Section 144Section 147Section 234ASection 234BSection 234CSection 250Section 69Section 69A

compliance by the assessee to the notices, therefore the AO has invoked the provisions of Sec. 144 of the Act and has made best judgment assessment and relied on the details available on record. The AO has issued notice u/sec 133(6) of the Act on Kotak Mahindra Bank calling

Sh. Badaluram, Fauladpur, Alwar vs. ITO, Ward-Behror, Behror

In the result, the appeal of the assessee is allowed

ITA 720/JPR/2023[2017-18]Status: DisposedITAT Jaipur09 Apr 2024AY 2017-18

For Appellant: Shri P.C. Parwal, (C.A.)For Respondent: Shri A.S. Nehra (Addl.CIT)

Section 142(1)Section 147Section 148Section 69

also be mentioned that there is no bar in law in considering the invalid return as a source of information for completing a best judgment assessment in terms of section 144 read with section 147 of the Act. Still Notice u/s 143(2) was served on the assessee along with

Ge Healthcare Finland Oy(Formerly Known As Instrumentarium Corporation Ltd, Bangalore vs. Dy. Director of Income Tax (International Taxation -1(1), Kolkata

In the result, all the two appeals of the assessee are allowed in part

ITA 311/KOL/2021[2007-08]Status: DisposedITAT Kolkata05 Apr 2024AY 2007-08

Bench: Shri Rajpal Yadav, Vice- & Shri Girish Agrawal]

Section 144Section 148Section 234ASection 250Section 9Section 92Section 92C

erred on facts and in law in approving the action of the AO in framing the Assessment Order as per best judgment assessment under Section 144 of the Act. 3. That the CIT(A) erred on facts and in law in upholding the transfer pricing addition of Rs.5

Ge Healthcare Finland Oy(Formerly Known As Instrumentarium Corporation Ltd, Bangalore vs. Dy. Director of Income Tax (International Taxation -1(1), Kolkata

In the result, all the two appeals of the assessee are allowed in part

ITA 310/KOL/2021[2005-06]Status: DisposedITAT Kolkata05 Apr 2024AY 2005-06

Bench: Shri Rajpal Yadav, Vice- & Shri Girish Agrawal]

Section 144Section 148Section 234ASection 250Section 9Section 92Section 92C

Ravikumar Kamleshbhai Shah, Ahmedabad vs. The Income Tax Officer, Ward -5(2)(1), Ahmedabad

In the result, the appeal of the assessee is allowed

ITA 497/AHD/2023[2017-18]Status: DisposedITAT Ahmedabad03 Apr 2024AY 2017-18

Bench: SHRI WASEEM AHMED (Accountant Member), MS. MADHUMITA ROY (Judicial Member)

For Appellant: Shri M. S. Chhajed, A.RFor Respondent: Shri C. Dharninath V. S., Sr. D.R

Section 115BSection 133(6)Section 145Section 68

Kachwala Gems v. Jt. CIT [2007] 288 ITR 10/158 Taxman 71 held that rejection of books of account under section 145 justified and best judgment assessment under section 144 of the Act needed. 10.1 The Hon'ble Bombay High Court in Bastiram Narayandas v. CIT [1994] 210 ITR 438/74 Taxman ... held that rejection of books of account justified under section 145 and best judgment assessment under section 144 needed. 10.2 The Hon'ble Gujarat High Court in the case of CIT Vs. Dhiraj R. Rungta reported in 40 taxmann.com 284 held that once rejection of books of account is justified

Civtect (India) Pvt. Ltd., Kolkata vs. ACIT, Cir-10(1), Kolkata

In the result, appeal of the assessee is allowed

ITA 1247/KOL/2023[2013-14]Status: DisposedITAT Kolkata02 Apr 2024AY 2013-14

Bench: Shri Rajpal Yadav, Hon’Ble & Dr. Manish Borad, Hon’Ble

For Appellant: Shri Siddharth Agarwal, AdvocateFor Respondent: Shri B.K. Singh, JCIT, Sr. D/R

Section 143(3)Section 250Section 271(1)(c)Section 274Section 40Section 43B

matter should be remanded except that the assessee had not participated properly in the assessment proceedings but for that reason best judgment assessment has been made and the income, which had escaped assessment has been added to the income of the assessee. It was incumbent upon the Revenue to make

Manish Kumar Mandiwal, Kolkata vs. ITO, Ward-25(1), Kolkata.

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

ITA 1328/KOL/2023[2017-18]Status: DisposedITAT Kolkata01 Apr 2024AY 2017-18

Bench: Dr. Manish Borad, Hon’Ble

For Appellant: Shri Miraj D. Shah, A/RFor Respondent: Shri S.B. Chakraborthy, JCIT

Section 144Section 250

have heard rival contentions and perused the material placed before us. We find that the ld. Assessing Officer has framed a best judgment assessment u/s 144 of the Act and the ld. CIT(A) during the course of first appellate proceedings, granted the assessee numerous opportunities of being heard

Laxmikant Tak, Panchsheel Ajmer vs. DCIT Circle -2 Ajmer, Jaipur Road Ajmer

In the result, appeal of the assessee is partly allowed

ITA 110/JPR/2024[2017-18]Status: DisposedITAT Jaipur28 Mar 2024AY 2017-18

For Appellant: Sh. C. M. AgarwalFor Respondent: Smt. Monisha Chaudhary (Addl.CIT)

Section 142(1)Section 143(2)Section 143(3)Section 145(3)

purchases but gross sale figure is not disturbed and the CIT (A) and Tribunal applied G.P. rate of last year for making the best judgment assessment. It cannot be said that relevant material evidence has not been considered by the ITAT or any irrelevant consideration has been taken into account

Chanubanda Primary Agricultural Cooperative Credit Society Ltd, Krishna Dist vs. Income Tax Officer, Ward-3(5), Vijayawada

In the result, appeal of the assessee is dismissed

ITA 152/VIZ/2023[2017-18]Status: DisposedITAT Visakhapatnam27 Mar 2024AY 2017-18

Bench: Shri Duvvuru Rl Reddy, Hon’Bleआयकर अपील सं./ I.T.A. No.152/Viz/2023 (निर्धारण वर्ा / Assessment Year :2017-18) The Chanubanda Primary Vs. The Income Tax Officer, Agricultural Cooperative Credit Ward-3(5), Society Limited, Chanubanda Vijayawada. Village, Chatrai Mandal, Krishna District, Andhra Pradesh–521214. Pan: Aacat 7978 H (अपीलधर्थी/ Appellant) (प्रत्यर्थी/ Respondent) अपीलधर्थी की ओर से/ Appellant By : Sri Asrss Siva Prasad, Ar प्रत्यधर्थी की ओर से / Respondent By : Dr. Aparna Villuri, Sr. Ar

For Appellant: Sri ASRSS Siva Prasad, ARFor Respondent: Dr. Aparna Villuri, Sr. AR

Section 139(1)Section 142(1)Section 144Section 80ASection 80A(5)Section 80PSection 80P(2)(a)

assessee and on perusal of the evidence furnished before him, the Ld. AO completed the assessment U/s. 144 of the Act as best judgment assessment based on the material available on record and as per the provisions of the Act. In the assessment order, the Ld. AO observed that since

The Chandragudem Primary Agrl Coop Credit Society Ltd, Krishna Dist vs. Income Tax Officer, Ward-3(5), Vijayawada

In the result, appeal of the assessee is dismissed

ITA 118/VIZ/2023[2017-18]Status: DisposedITAT Visakhapatnam27 Mar 2024AY 2017-18

Bench: Shri Duvvuru Rl Reddy, Hon’Bleआयकर अपील सं./ I.T.A. No.118/Viz/2023 (निर्धारण वर्ा / Assessment Year : 2017-18) The Chandragudem Primary Agrl. Vs. Income Tax Officer, Coop. Credit Society Limited Noh Ward-3(5), 2091, Chandragudem Village, Vijayawada. Mylavaram Mandal, Krishna District, Andhra Pradesh-521230. Pan: Aacat 8165 C (अपीलधर्थी/ Appellant) (प्रत्यर्थी/ Respondent) अपीलधर्थी की ओर से/ Appellant By : Sri Asrss Siva Prasad, Ar प्रत्यधर्थी की ओर से / Respondent By : Dr. Aparna Villuri, Sr. Ar सुिवधई की तधरीख / Date Of Hearing : 20/03/2024 घोर्णध की तधरीख/Date Of : 27/03/2024 Pronouncement O R D E R Per Duvvuru Rl Reddy:

For Appellant: Sri ASRSS Siva Prasad, ARFor Respondent: Dr. Aparna Villuri, Sr. AR

Section 139(1)Section 142(1)Section 144Section 80A(5)Section 80PSection 80P(2)(a)

Ranjan Rhode, New Delhi vs. ITO(International Taxation), Ward-3(1)(2), New Delhi

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

ITA 4887/DEL/2018[2014-15]Status: DisposedITAT Delhi21 Mar 2024AY 2014-15

Bench: Shri Challa Nagendra Prasad & Dr. B.R.R. Kumar

Section 144Section 54

capital gain bank account scheme. 6. We observe that the assessment was made ex parte u/s 144 of the Act as best judgment assessment in the absence of details furnished by the assessee and the Ld.CIT(A) also disposed of the appeal without receiving the report/comments

Naramuthu Naicker Nataraj, Tirupur vs. ITO, Ward-1(2), Tirupur

In the result, the appeal of the assessee in ITA No

ITA 1400/CHNY/2023[2017-18]Status: DisposedITAT Chennai20 Mar 2024AY 2017-18

Bench: Shri Mahavir Singh

For Appellant: Shri. Yeshwanth Kumar, CA

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

also. Since assessee offered :- 3 -: no explanation or there is no compliance on the part of the assessee, ld. Assessing Officer based on best judgment assessment order u/s.144 of the Act added the cash deposits of Rs.15,00,000/- as unexplained money u/s.69A of the Act r.w.s. 115BBE

The N.D.D. P and T E.C.C Society Ltd., Nellore vs. Income Tax Officer, Ward-1, Nellore

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

ITA 611/HYD/2023[2017-18]Status: DisposedITAT Hyderabad19 Mar 2024AY 2017-18

Bench: Shri R.K. Panda, Vice- & Shri Laliet Kumarआ.अपी.सं /Ita No.611/Hyd/2023 (निर्धारण वर्ष / Assessment Year: 2017-18) The Nddp & Tec Society Vs. Income Tax Officer Ltd, Ward-1 Nellore. Nellore. Pan:Aactt5322J (Appellant) (Respondent) /Assessee By: Shri M. Chandra Mouleswara निर्धारितीती द्वारा Rao, C.A /Revenue By: Shri Shakeer Ahmed, Sr.Ar राजस्‍व द्वारा ई की तारीखरीख/Date Of Hearing: 14/03/2024 सुनवाई की तारीखरीख/Pronouncement: 19/03/2024 घोषणा

For Appellant: Shri M. Chandra MouleswaraFor Respondent: Shri Shakeer Ahmed, Sr.AR

Section 139Section 142(1)Section 144Section 69ASection 80P

accounts etc. A final show-cause notice dated 06-11- 2019 was issued and served by e-mail, the assessee proposing to pass best judgment assessment u/s 144 of the Act and determine the sum payable by the assessee on the basis of material evidences collected during the course ... appointed date no details were furnished through E-Proceedings. The Assessing Officer was left with no option but to complete the best judgment assessment on the basis of material evidence Page 3 of 8 ITA 611 of 2023 NDDP and TEC Society Ltd gathered during the assessment proceedings. Thus

Sri. Panati Vikramdeva Reddy, Bengaluru vs. Assistant Commissioner of Income Tax, Circle-4(3)(1), Bengaluru

In the result, the appeals of the assessee are dismissed

ITA 121/BANG/2024[2014-15]Status: DisposedITAT Bangalore14 Mar 2024AY 2014-15

Bench: Shri Narender Kumar Choudhry & Shri Laxmi Prasad Sahu

For Appellant: Shri Narendra Sharma, AdvocateFor Respondent: Shri Subramanian S., Jt.CIT(DR)(ITAT), Bengaluru

Section 131Section 132Section 142(1)Section 147Section 148Section 271Section 271(1)(b)Section 274Section 44A

said that assessee is not well versed in e-communication. The assessee filed return only when notice was issued u/s. 144 for making best judgment assessment. Before it, he did not bother to pursue the notices issued earlier. It clearly shows that the assessee is a habitual defaulter

Sri. Panati Vikramdeva Reddy, Bengaluru vs. Assistant Commissioner of Income Tax, Circle-4(3)(1), Bengaluru

In the result, the appeals of the assessee are dismissed

ITA 120/BANG/2024[2013-14]Status: DisposedITAT Bangalore14 Mar 2024AY 2013-14

Bench: Shri Narender Kumar Choudhry & Shri Laxmi Prasad Sahu

For Appellant: Shri Narendra Sharma, AdvocateFor Respondent: Shri Subramanian S., Jt.CIT(DR)(ITAT), Bengaluru

Section 131Section 132Section 142(1)Section 147Section 148Section 271Section 271(1)(b)Section 274Section 44A

Venkatesan, Chennai vs. ITO, Non Corporate Ward 8(1), Chennai

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

ITA 1332/CHNY/2023[2017-18]Status: DisposedITAT Chennai12 Mar 2024AY 2017-18

Bench: Shri Mahavir Singh & Shri Manoj Kumar Aggarwalआयकर अपील सं./Ita No.1332/Chny/2023 िनधा"रण वष" /Assessment Year:2017-2018 Shri Venkatesan, The Income Tax Officer, No.T/D 122, Koyambedu, V. Non Corporate Ward 8(1) Chennai 600092. Chennai. Pan: Aadpv 2269F (अपीलाथ"/Appellant) (""यथ"/Respondent) अपीलाथ" क" ओर से/Appellant By : Shri G. Baskar, Advocate ""यथ" क" ओर से/Respondent By : Shri Arv Sreenivasan, Irs, Addl. Cit. सुनवाई क" तारीख/Date Of Hearing : 12.03.2024 घोषणा क" तारीख/Date Of Pronouncement : 12.03.2024 आदेश /O R D E R Per Mahavir Singh, Vp:

For Appellant: Shri G. Baskar, AdvocateFor Respondent: Shri ARV Sreenivasan, IRS, Addl. CIT

Section 144Section 147Section 148Section 69A

preferred an appeal before us. 4. Now before us, the ld.counsel for the assessee submitted that the assessment was framed ex-parte and best judgment assessment u/s.144 of the Act for assessing the cash deposits made by assessee amounting to ITA No.1332/Chny /2023 3 Rs.2

Reporter Family Private Trust, Mumbai vs. Assessing Officer - ITO (It) 26(1)(1), Kautilya Bhavan, Bkc, Mumbai

In the result, appeal of the assessee is allowed

ITA 3858/MUM/2023[2010-11]Status: DisposedITAT Mumbai08 Mar 2024AY 2010-11

Bench: SHRI AMIT SHUKLA (Judicial Member), SHRI GAGAN GOYAL (Accountant Member)

Section 147Section 148Section 61

assessee did not respond to the notices. Finally, ld. AO issued a show-cause notice to pass the assessment by way of his best judgment assessment. This final show-cause was also not served / responded by the assessee. Accordingly, ld. AO assessed the income at Rs.2

Kewal Singh, Fatehabad vs. ITO, Ward-1, Fatehabad

In the result, the appeal of the assessee is dismissed

ITA 668/DEL/2020[2013-14]Status: DisposedITAT Delhi05 Mar 2024AY 2013-14

Bench: Shri Saktijit Dey & Shri M. Balaganeshshri Kewal Singh, Vs. Ito, 162, Tower Wali Gali, Ward-1, Professor Colony, Fatehabad Fatehabad, Haryana (Appellant) (Respondent) Pan: Bcaps2250P Assessee By : None Revenue By: Ms. Indu Bala Saini, Sr. Dr Date Of Hearing 06/12/2023 Date Of Pronouncement 05/03/2024

For Appellant: NoneFor Respondent: Ms. Indu Bala Saini, Sr. DR

Section 142(1)Section 144Section 69

observing as under:- “3.2 Grounds of Appeal Nos. 2 & 3 are regarding making the assessment by resorting to best judgment assessment on the basis of cash deposited in the bank account of the assessee. The AO has mentioned that the assessee filed return Shri Kewal Singh declaring income