“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

Amtula Tasneem Heera Banu, Chennai vs. ITO, Ncw-10(1), Chennai

In the result, appeals filed by the assessee are allowed for statistical purposes

ITA 1959/CHNY/2025[2018-19]Status: DisposedITAT Chennai04 Dec 2025AY 2018-19

Bench: Shri Aby T. Varkey & Shri Jagadish

For Appellant: Mr.M. Karunakaran, AdvFor Respondent: Ms.R. Anitha, Addl.CIT

Section 115BSection 144Section 148Section 271ASection 54Section 54FSection 69A

formed a view that there was escapment of income; and consequently, issued notice u/s.148 of the Act on 30.03.2022 and framed best judgment assessment u/s.144 of the Act, finding no response from assessee to his several notices. Thus, the AO added ₹3.10 Crs. u/s.69A of the Act and taxed ... Heera Banu :: 4 :: 5. Having heard both the parties and after perusal of the records, it is noted that the AO has passed best judgment assessment u/s.144 of the Act by making addition u/s.69A of the Act of the entire consideration received from the sale of an immovable property

Rakesh Jain, Mumbai vs. National Faceless Appeal Centre (NFAC), Delhi

In the result the appeal filed by the assessee stands allowed

ITA 546/MUM/2025[2017-18]Status: DisposedITAT Mumbai04 Dec 2025AY 2017-18

Bench: Shri Sandeep Gosain & Shri Prabhash Shankarι.Τ.Α. No.546/Mum/2025 A.Y: 2017-18 Rakesh Jain Vs Dcit - 26(1) Shop No. 29, 2Nd Floor, Kautilya Bhavan, 126-128, Sheikh Menon Bandra, Mumbai St., Trimurti Estate, Kalbadevi, Mumbai Pan – Aaιρj7359P (Appellant) (Respondent) Assessee By | Shri Vimal Punmiya Revenue By || Shri Annavaran Kosuri, Sr. Dr Date Of Hearing 17.09.2025 Date Of Pronouncement 04.12.2025 Order Per: Shri. Sandeep Gosain, J.M.: The Present Appeal Has Been Filed By The Assessee Challenging The Impugned Order Dt.28.11.2024 Passed Under Section 250 Of The Income Tax Act, 1961 (‘The Act'), By The National Faceless Appeal Centre (Nfac) / Cit(A) For The

Section 115Section 144Section 145Section 156Section 250Section 274Section 68

Income Tax Officer, Ward II(1), Coimbatore TAX CASE (APPEAL) NO. 190 OF 2014 IT : Books of account cannot be rejected and best judgment assessment cannot be done in a case where accounts have been audited under section 44AB Section 144, read with sections 44AB and 68, of the Income ... Best judgment assessment (Scope of) Assessment year 2009-10 During assessment proceedings, assessee could not produce confirmation letter from large number of creditors in respect of amount borrowed Assessee claimed that it had not maintained books of account and, therefore, amount in question could be taxed as its business income

Kolhar Bhagwatipur Vapari Gramin Bigarshethi Sahakari Patsanstha Ltd, Ahilyanagar vs. ITO, Ward-1, Ahilyanagar

In the result, both the appeals filed by the Assessee are

ITA 1792/PUN/2025[2015-16]Status: DisposedITAT Pune03 Dec 2025AY 2015-16

Bench: Dr. Manish Borad & Shri Vinay Bhamore

For Respondent: Shri Bharat Andhale, Addl.CIT

Section 147Section 148Section 250

case of assessee, which is a cooperative society. Assessee could not appear before the Ld.AO resulting into passing of best judgment assessment and huge additions have been made on account of alleged unexplained cash deposits received from its members. He further submitted that Ld.CIT(A) has not dealt with ... Assessee failed to make compliance to any of the statutory notices issued u/s. 148 and 142(1) of the Act. Ld.AO passed the best judgment assessments and assessed ITA.Nos.1791 & 1792/PUN/2025 (Kolhar Bhagwatipur Vapari Gramin Bigarsethi Sahakari Patsanstha Ltd.) the income

Kolhar Bhagwatipur Vapari Gramin Bigarshethi Sahakari Patsanstha Ltd, Ahilyanagar vs. ITO, Ward-1, Ahilyanagar

In the result, both the appeals filed by the Assessee are allowed for statistical purposes

ITA 1791/PUN/2025[2016-17]Status: DisposedITAT Pune03 Dec 2025AY 2016-17

Bench: Dr. Manish Borad & Shri Vinay Bhamore

For Appellant: Shri Prasad S. Bhandari, CAFor Respondent: Shri Bharat Andhale, Addl.CIT

Section 147Section 148Section 250

case of assessee, which is a cooperative society. Assessee could not appear before the Ld.AO resulting into passing of best judgment assessment and huge additions have been made on account of alleged unexplained cash deposits received from its members. He further submitted that Ld.CIT(A) has not dealt with ... Assessee failed to make compliance to any of the statutory notices issued u/s. 148 and 142(1) of the Act. Ld.AO passed the best judgment assessments and assessed 3 ITA.Nos.1791 & 1792/PUN/2025 (Kolhar Bhagwatipur Vapari Gramin Bigarsethi Sahakari Patsanstha Ltd.) the income

Mohd Akram Abdul Latif Ansari, Bhiwandi vs. Income Tax Officer Ward 1(1), Kalyan

ITA 3970/MUM/2025[2017-18]Status: DisposedITAT Mumbai03 Dec 2025AY 2017-18

Bench: Smt. Beena Pillai (Jm) & Shri Omkareshwar Chidara (Am) Mohd. Akram Abdul Latif Ansari Ito Ward 1(1) Gala No. 02, Mh No. 71, More Mohan Plaza, Near Building, Kotergate Road Vs. Poddar School Kap Kaneri, Bhiwandi Wayale Nagar, Thane, Maharashtra-421 302. Khadagpada, Kalyan Pan : Adnpa2221M Appellant Respondent

For Appellant: Shri Pravin SalunkheFor Respondent: Shri Punit Jhabak

Section 142(1)Section 69A

Income Tax Act was issued. Since there was no response from the appellant, the AO proceeded with assessment and completed the same as best Judgment assessment through e-proceedings. Since the appellant has not filed any Return of Income, the AO presumed that there is no explanation to offer

Gourav Bhagwandas Agarwal, Pune vs. ITO Ward 8(1), Pune

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

ITA 894/PUN/2025[2017-18]Status: DisposedITAT Pune28 Nov 2025AY 2017-18

Bench: Shri R.K. Panda & Ms. Astha Chandra

For Appellant: Shri Digambar SurwaseFor Respondent: Shri Manish M. Mehta

Section 147Section 148Section 151Section 234ASection 69A

file the reply at the fag end of the proceedings just to delay the scrutiny. He, therefore, proceeded to complete the assessment as best judgment assessment u/s 144 of the Act. The Ld. AO, however, took cognizance of the reply filed by the assessee which is reproduced in his assessment

Appaso Sampatrao Mane, Pune vs. ITO Ward 7(1), Pune

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

ITA 1006/PUN/2025[2016-17]Status: DisposedITAT Pune28 Nov 2025AY 2016-17

For Appellant: Department byFor Respondent: Date of hearing

Section 139Section 144Section 147Section 148Section 194Section 69

assessee failed to file any compliance before the Ld. AO which constrained the Ld. AO to make a best judgment assessment under section 144 of the Act based on the information available on-line on record. The Ld. AO therefore completed the assessment at total income of Rs.59

Simon Pavan Kumar Moses, Warangal vs. Income Tax Officer, Ward-1, Warang Al

In the result, the appeal filed by the assessee is dismissed

ITA 557/HYD/2025[2012-13]Status: DisposedITAT Hyderabad28 Nov 2025AY 2012-13

Section 142(1)Section 144Section 147Section 148

issued and called upon the assessee to furnish relevant details, however, there was no compliance from the assessee. Therefore, the A.O. passed best judgment assessment order under Section 144 r.w.s.147 of the Act on 13.12.2019 and determined the total income at Rs.3,88,170/- by making addition

Pratishtha Images Pvt Ltd, Delhi vs. DCIT, Central Circle-28, Delhi

ITA 4304/DEL/2025[2020-21]Status: DisposedITAT Delhi28 Nov 2025AY 2020-21

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