estimation of income — 3,061 case laws

Anil Kumar Jain, Raipur vs. Assistant Commissioner of Income Tax, Central

In the result, appeal of the assessee in ITA No

ITA 585/RPR/2025[2019-20]Status: DisposedITAT Raipur06 Jan 2026AY 2019-20

Bench: Shri Partha Sarathi Chaudhuryआयकर अपील सं./Ita Nos.584 & 585/Rpr/2025 "नधा"रण वष" /Assessment Years : 2018-19 & 2019-20 Anil Kumar Jain 34, Maruti Life Style, Ravi Shankar University, S.O, Raipur-492 010 Pan: Ahypj7657H .......अपीलाथ" / Appellant बनाम / V/S. The Assistant Commissioner Of Income Tax (Central), Bilaspur (C.G.)

For Appellant: Shri Abhishek Mahawar, CAFor Respondent: Dr. Priyanka Patel, Sr. DR

Section 144Section 145(3)Section 153ASection 3

plain reading of the aforementioned provisions would indicate that the AO wields an authority to make additions on the basis of estimation of income upon fulfillment of the conditions mentioned in Section 145(3) of the Act. Once the AO is satisfied about the existence of irregularities in the books ... OnLine Kar 8512], has held that in cases where the Revenue had failed to reject the books of account and proceeded to an estimation of income without framing the assessment under Section 144 of the Act, such an action is unsustainable as per law. The relevant paragraph of the said

Anil Kumar Jain, Raipur vs. Assistant Commissioner of Income Tax, Central

In the result, appeal of the assessee in ITA No

ITA 584/RPR/2025[2018-19]Status: DisposedITAT Raipur06 Jan 2026AY 2018-19

Bench: Shri Partha Sarathi Chaudhuryआयकर अपील सं./Ita Nos.584 & 585/Rpr/2025 "नधा"रण वष" /Assessment Years : 2018-19 & 2019-20 Anil Kumar Jain 34, Maruti Life Style, Ravi Shankar University, S.O, Raipur-492 010 Pan: Ahypj7657H .......अपीलाथ" / Appellant बनाम / V/S. The Assistant Commissioner Of Income Tax (Central), Bilaspur (C.G.)

For Appellant: Shri Abhishek Mahawar, CAFor Respondent: Dr. Priyanka Patel, Sr. DR

Section 144Section 145(3)Section 153ASection 3

plain reading of the aforementioned provisions would indicate that the AO wields an authority to make additions on the basis of estimation of income upon fulfillment of the conditions mentioned in Section 145(3) of the Act. Once the AO is satisfied about the existence of irregularities in the books ... OnLine Kar 8512], has held that in cases where the Revenue had failed to reject the books of account and proceeded to an estimation of income without framing the assessment under Section 144 of the Act, such an action is unsustainable as per law. The relevant paragraph of the said

DCIT, Central Circle 7(1), Mumbai vs. Subhkaran & Sons, Mumbai

In the result, appeal of the assessee is allowed and that by the revenue is dismissed, for Assessment Year 2013-14

ITA 3986/MUM/2025[2014-15]Status: DisposedITAT Mumbai06 Jan 2026AY 2014-15

Bench: Shri Sandeep Gosain & Shri Girish Agrawal

For Appellant: Shri Snehal Shah, CAFor Respondent: Shri R A Dhyani, CIT DR

Section 1Section 132

clearly Bad in Law, illegal and ultra-vires the provision of the Act. 6. The Learned CIT (A)-49 Mumbai has erred in estimating additional Income at the rate of 0.5% of sales of Rs. 105,51,20,243/- which come to Rs. 52,75,601/- without appreciating the facts ... case and in law. The Ld. CIT(A) failed to acknowledge the legal position that the Assessing Officer is the best judge to estimate the income when the books of accounts are rejected under Section AYs: 2013-14 to 2017-18 145(3), as per the judicial precedents

DCIT, Central Circle 7(1), Mumbai vs. Subhkaran & Sons, Mumbai

In the result, appeal of the assessee is allowed and that by the revenue is dismissed, for Assessment Year 2013-14

ITA 3969/MUM/2025[2015-16]Status: DisposedITAT Mumbai06 Jan 2026AY 2015-16

Bench: Shri Sandeep Gosain & Shri Girish Agrawal

For Appellant: Shri Snehal Shah, CAFor Respondent: Shri R A Dhyani, CIT DR

Section 1Section 132

clearly Bad in Law, illegal and ultra-vires the provision of the Act. 6. The Learned CIT (A)-49 Mumbai has erred in estimating additional Income at the rate of 0.5% of sales of Rs. 105,51,20,243/- which come to Rs. 52,75,601/- without appreciating the facts ... case and in law. The Ld. CIT(A) failed to acknowledge the legal position that the Assessing Officer is the best judge to estimate the income when the books of accounts are rejected under Section AYs: 2013-14 to 2017-18 145(3), as per the judicial precedents

DCIT, Central Circle 7(1), Mumbai vs. Subhkaran & Sons, Mumbai

In the result, appeal of the assessee is allowed and that by the revenue is dismissed, for Assessment Year 2013-14

ITA 3968/MUM/2025[2017-18]Status: DisposedITAT Mumbai06 Jan 2026AY 2017-18

Bench: Shri Sandeep Gosain & Shri Girish Agrawal

For Appellant: Shri Snehal Shah, CAFor Respondent: Shri R A Dhyani, CIT DR

Section 1Section 132

clearly Bad in Law, illegal and ultra-vires the provision of the Act. 6. The Learned CIT (A)-49 Mumbai has erred in estimating additional Income at the rate of 0.5% of sales of Rs. 105,51,20,243/- which come to Rs. 52,75,601/- without appreciating the facts ... case and in law. The Ld. CIT(A) failed to acknowledge the legal position that the Assessing Officer is the best judge to estimate the income when the books of accounts are rejected under Section AYs: 2013-14 to 2017-18 145(3), as per the judicial precedents

DCIT, Central Circle 7(1), Mumbai vs. Subhkaran & Sons, Mumbai

In the result, appeal of the assessee is allowed and that by the revenue is dismissed, for Assessment Year 2013-14

ITA 3967/MUM/2025[2016-17]Status: DisposedITAT Mumbai06 Jan 2026AY 2016-17

Bench: Shri Sandeep Gosain & Shri Girish Agrawal

For Appellant: Shri Snehal Shah, CAFor Respondent: Shri R A Dhyani, CIT DR

Section 1Section 132

clearly Bad in Law, illegal and ultra-vires the provision of the Act. 6. The Learned CIT (A)-49 Mumbai has erred in estimating additional Income at the rate of 0.5% of sales of Rs. 105,51,20,243/- which come to Rs. 52,75,601/- without appreciating the facts ... case and in law. The Ld. CIT(A) failed to acknowledge the legal position that the Assessing Officer is the best judge to estimate the income when the books of accounts are rejected under Section AYs: 2013-14 to 2017-18 145(3), as per the judicial precedents

DCIT, Central Circle 7(1), Mumbai vs. Subhkaran & Sons, Mumbai

In the result, appeal of the assessee is allowed and that by the revenue is dismissed, for Assessment Year 2013-14

ITA 3966/MUM/2025[2013-14]Status: DisposedITAT Mumbai06 Jan 2026AY 2013-14

Bench: Shri Sandeep Gosain & Shri Girish Agrawal

For Appellant: Shri Snehal Shah, CAFor Respondent: Shri R A Dhyani, CIT DR

Section 1Section 132

clearly Bad in Law, illegal and ultra-vires the provision of the Act. 6. The Learned CIT (A)-49 Mumbai has erred in estimating additional Income at the rate of 0.5% of sales of Rs. 105,51,20,243/- which come to Rs. 52,75,601/- without appreciating the facts ... case and in law. The Ld. CIT(A) failed to acknowledge the legal position that the Assessing Officer is the best judge to estimate the income when the books of accounts are rejected under Section AYs: 2013-14 to 2017-18 145(3), as per the judicial precedents

Subhkaran and Sons, Mumbai vs. DCIT, Central Circle 7(1), Mumbai

In the result, appeal of the assessee is allowed and that by the revenue is dismissed, for Assessment Year 2013-14

ITA 2910/MUM/2025[2016-17]Status: DisposedITAT Mumbai06 Jan 2026AY 2016-17

Bench: Shri Sandeep Gosain & Shri Girish Agrawal

For Appellant: Shri Snehal Shah, CAFor Respondent: Shri R A Dhyani, CIT DR

Section 1Section 132

clearly Bad in Law, illegal and ultra-vires the provision of the Act. 6. The Learned CIT (A)-49 Mumbai has erred in estimating additional Income at the rate of 0.5% of sales of Rs. 105,51,20,243/- which come to Rs. 52,75,601/- without appreciating the facts ... case and in law. The Ld. CIT(A) failed to acknowledge the legal position that the Assessing Officer is the best judge to estimate the income when the books of accounts are rejected under Section AYs: 2013-14 to 2017-18 145(3), as per the judicial precedents

Subhkaran and Sons, Mumbai vs. DCIT, Central Circle 7(1), Mumbai

In the result, appeal of the assessee is allowed and that by the revenue is dismissed, for Assessment Year 2013-14

ITA 2909/MUM/2025[2014-15]Status: DisposedITAT Mumbai06 Jan 2026AY 2014-15

Bench: Shri Sandeep Gosain & Shri Girish Agrawal

For Appellant: Shri Snehal Shah, CAFor Respondent: Shri R A Dhyani, CIT DR

Section 1Section 132

clearly Bad in Law, illegal and ultra-vires the provision of the Act. 6. The Learned CIT (A)-49 Mumbai has erred in estimating additional Income at the rate of 0.5% of sales of Rs. 105,51,20,243/- which come to Rs. 52,75,601/- without appreciating the facts ... case and in law. The Ld. CIT(A) failed to acknowledge the legal position that the Assessing Officer is the best judge to estimate the income when the books of accounts are rejected under Section AYs: 2013-14 to 2017-18 145(3), as per the judicial precedents

Subhkaran and Sons, Mumbai vs. DCIT, Central Circle 7(1), Mumbai

In the result, appeal of the assessee is allowed and that by the revenue is dismissed, for Assessment Year 2013-14

ITA 2908/MUM/2025[2013-14]Status: DisposedITAT Mumbai06 Jan 2026AY 2013-14

Bench: Shri Sandeep Gosain & Shri Girish Agrawal

For Appellant: Shri Snehal Shah, CAFor Respondent: Shri R A Dhyani, CIT DR

Section 1Section 132

clearly Bad in Law, illegal and ultra-vires the provision of the Act. 6. The Learned CIT (A)-49 Mumbai has erred in estimating additional Income at the rate of 0.5% of sales of Rs. 105,51,20,243/- which come to Rs. 52,75,601/- without appreciating the facts ... case and in law. The Ld. CIT(A) failed to acknowledge the legal position that the Assessing Officer is the best judge to estimate the income when the books of accounts are rejected under Section AYs: 2013-14 to 2017-18 145(3), as per the judicial precedents

Subhkaran and Sons, Mumbai vs. DCIT, Central Circle 7(1), Mumbai

In the result, appeal of the assessee is allowed and that by the revenue is dismissed, for Assessment Year 2013-14

ITA 2907/MUM/2025[2015-16]Status: DisposedITAT Mumbai06 Jan 2026AY 2015-16

Bench: Shri Sandeep Gosain & Shri Girish Agrawal

For Appellant: Shri Snehal Shah, CAFor Respondent: Shri R A Dhyani, CIT DR

Section 1Section 132

clearly Bad in Law, illegal and ultra-vires the provision of the Act. 6. The Learned CIT (A)-49 Mumbai has erred in estimating additional Income at the rate of 0.5% of sales of Rs. 105,51,20,243/- which come to Rs. 52,75,601/- without appreciating the facts ... case and in law. The Ld. CIT(A) failed to acknowledge the legal position that the Assessing Officer is the best judge to estimate the income when the books of accounts are rejected under Section AYs: 2013-14 to 2017-18 145(3), as per the judicial precedents

Subhkaran and Sons, Mumbai vs. DCIT, Central Circle 7(1), Mumbai

In the result, appeal of the assessee is allowed and that by the

ITA 2906/MUM/2025[2017-18]Status: DisposedITAT Mumbai06 Jan 2026AY 2017-18

Bench: Shri Sandeep Gosain & Shri Girish Agrawal

For Appellant: Shri Snehal Shah, CAFor Respondent: Shri R A Dhyani, CIT DR

Section 132

clearly Bad in Law, illegal and ultra-vires the provision of the Act. 6. The Learned CIT (A)-49 Mumbai has erred in estimating additional Income at the rate of 0.5% of sales of Rs. 105,51,20,243/- which come to Rs. 52,75,601/- without appreciating the facts ... case and in law. The Ld. CIT(A) failed to acknowledge the legal position that the Assessing Officer is the best judge to estimate the income when the books of accounts are rejected under Section 145(3), as per the judicial precedents in the case of CIT vs. State Trading

Rainbow Vanijya Pvt Ltd., New Delhi vs. ACIT, Kolkata

In the result, the appeal of the assessee is allowed

ITA 1891/KOL/2025[2020-21]Status: DisposedITAT Kolkata31 Dec 2025AY 2020-21

Section 142(1)Section 143(2)Section 143(3)Section 144BSection 44A

while making the assessment, the Id. AO has not rejected the books of account u/s 145(3) of the Act and therefore, the estimation of income at the rate of 1% of the total of purchases/ sales and loans cannot be made unless the books are rejected and results ... reject the books of account. The Hon'ble Delhi High Court in PCIT v. Forum Sales Pvt. Ltd. (supra) has clearly held that estimation of income is permissible only after rejection of books of account on valid grounds. In the absence of such rejection, the AO's estimation

Integrated Service Point Ltd., Chennai vs. ACIT, Central Circle-2(4), Chennai

Accordingly, the assessee’s appeals in ITA Nos. 1881, 1882, and 1883/Chny/2025 for A.Ys. 2016-17, 2019-20, and 2022-23 are allowed

ITA 1882/CHNY/2025[2019-20]Status: DisposedITAT Chennai30 Dec 2025AY 2019-20

Bench: Hon’Ble Shri Manu Kumar Giri & Shri Hon’Ble Jagadishआयकर अपील सं./ Ita Nos.1881, 1882 & 1883/Chny/2025 िनधा;रण वष; /Assessment Years: 2016-17, 2019-20 & 2022-23

For Appellant: Mr. Y. Sridhar, FCAFor Respondent: Mr. Bipin C.N, CIT

Section 132Section 132(4)Section 134(4)Section 250

inadequate, no cogent reasoning or adverse finding was recorded to justify such a conclusion. Accordingly, the ld. CIT(A) sustained the estimation of income at 8% on the disputed transportation expenses of Rs. 3,02,02,100/-, resulting in an addition of Rs. 24,16,168/-, and directed deletion

ACIT, Chennai vs. Integrated Service Point Limited, Anna Nagar

Accordingly, the assessee’s appeals in ITA Nos. 1881, 1882, and 1883/Chny/2025 for A.Ys. 2016-17, 2019-20, and 2022-23 are allowed

ITA 1879/CHNY/2025[2022-23]Status: DisposedITAT Chennai30 Dec 2025AY 2022-23

Bench: Hon’Ble Shri Manu Kumar Giri & Shri Hon’Ble Jagadishआयकर अपील सं./ Ita Nos.1881, 1882 & 1883/Chny/2025 िनधा;रण वष; /Assessment Years: 2016-17, 2019-20 & 2022-23

For Appellant: Mr. Y. Sridhar, FCAFor Respondent: Mr. Bipin C.N, CIT

Section 132Section 132(4)Section 134(4)Section 250

inadequate, no cogent reasoning or adverse finding was recorded to justify such a conclusion. Accordingly, the ld. CIT(A) sustained the estimation of income at 8% on the disputed transportation expenses of Rs. 3,02,02,100/-, resulting in an addition of Rs. 24,16,168/-, and directed deletion

G S Automobiles Private Limited, Delhi vs. DCIT, Central Circle-6, Delhi

In the result, the appeal filed by the assessee is partly allowed

ITA 4289/DEL/2025[2015-16]Status: DisposedITAT Delhi30 Dec 2025AY 2015-16

Bench: Shri Satbeer Singh Godara & Shri S. Rifaur Rahmang.S. Automobiles Private Limited, Vs. Dcit, Central Circle 6, B – 26, Okhla Industrial Area, Phase Ii, Delhi. Delhi – 110 020. (Pan : Aadcg1150B) (Appellant) (Respondent) Assessee By : Shri Neeraj Mangla, Ca Revenue By : Shri Jitender Singh, Cit Dr Date Of Hearing : 19.11.2025 Date Of Order : 30.12.2025 O R D E R Per S. Rifaur Rahman: 1. The Assessee Has Filed Appeal Against The Order Of The Learned Commissioner Of Income Tax (Appeals), Delhi – 24 [“Ld. Cit(A)”, For Short] Dated 19.06.2025 For The Assessment Year 2015-16 Raising Following Grounds Of Appeal :- “1. That The Orders Passed By Ld. Ao U/S 153C Of The Act As Well As Appellate Order Passed By Ld. Cit(A) Are Bad In Law & Are Passed In Contravention Of Prevailing Law As Well As Facts Of The Case, Therefore Liable To Be Annulled. 2. That Assumption Of Jurisdiction Of Ld. Ao In Consequence Of Order Passed By Ld. Pcit U/S 127(3) Of The Act Of The Act Is Illegal & Not Tenable Under The Law Because Of Said Order Being Mechanical & Being Passed

For Appellant: Shri Neeraj Mangla, CAFor Respondent: Shri Jitender Singh, CIT DR

Section 127(3)Section 153CSection 153DSection 68Section 69C

undisclosed income being of vital importance. All the aforenoted judgments thus reinforce the requirement of incriminating material having an ineradicable link to the estimation of income for a particular AY. 57. It becomes pertinent to note that both Sections 153A and 153C require the assessee upon being placed on notice ... those pending assessments or reopening of such concluded assessments to which alone it relates or is likely to have a bearing on the estimation of income. The mere existence of a power to assess or reassess the six AYs' immediately preceding the AY corresponding to the year of search

Hardayal Milk Products Private Limited, Shikohabad vs. DCIT, Circle-2(2)(1), Firozabad

In the result, the appeal preferred by the assessee is partly

ITA 342/AGR/2025[2013-14]Status: DisposedITAT Agra29 Dec 2025AY 2013-14

Bench: : Shri S. Rifaur Rahman & Shri Sunil Kumar Singhassessment Year: 2013-14

Section 143(2)Section 145(3)

circumstances of the case, net profit rate of 1% is found to be reasonable. He, therefore, estimated income @ 1% and proceeded to estimate the income at Rs.2,50,43,467/-. After making the adjustment of depreciation claimed by the assessee in its profit and loss account and depreciation ... That on the facts and in the circumstances of the case and in law, the learned CIT(A) erred in upholding the estimation of income by the AO at 1% of the turnover amounting to 72,50,43,496, resulting in an arbitrary addition of 71,48,87,770, solely

Ashoka Industrial Fastners, Ludhiana vs. DCIT Central Circle 3, Lduhiana

In the result, the appeal is partly allowed

ITA 1141/CHANDI/2025[2022-23]Status: DisposedITAT Chandigarh29 Dec 2025AY 2022-23

Bench: SHRI. LALIET KUMAR (Judicial Member), SHRI. KRINWANT SAHAY (Accountant Member)

For Appellant: Shri Sudhir Sehgal, AdvocateFor Respondent: Shri Manav Bansal, CIT,DR

Section 132Section 145(3)Section 147

unjustified in substituting the declared results and applying an arbitrary GP rate. In absence of any rejection of books, estimation of income by enhancing GP is unsustainable in law. Therefore, even assuming (without admitting) that the alleged figures represent unrecorded sales, only the declared net profit rate ... deployment of managerial, administrative, and infrastructural resources, and the taxation of the entire gross profit would therefore result in an excessive and unrealistic estimation of income. 9.1 At the same time, we find force in the contention of the Revenue that the net profit rate of 1.35% adopted

Ashoka Industrial Fastners, Ludhiana vs. DCIT Central Circle-3, Ludhiana

In the result, the appeal is partly allowed

ITA 1140/CHANDI/2025[2020-21]Status: DisposedITAT Chandigarh29 Dec 2025AY 2020-21

For Appellant: \nShri Sudhir Sehgal, AdvocateFor Respondent: Shri Manav Bansal, CIT, DR

Section 145(3)Section 147

unjustified in substituting the\ndeclared results and applying an arbitrary GP rate. In absence of any rejection of\nbooks, estimation of income by enhancing GP is unsustainable in law. Therefore,\neven assuming (without admitting) that the alleged figures represent unrecorded\nsales, only the declared net profit rate ... deployment of managerial,\nadministrative, and infrastructural resources, and the taxation of the entire gross\nprofit would therefore result in an excessive and unrealistic estimation of income.\n9.1 At the same time, we find force in the contention of the Revenue that the\nnet profit rate of 1.35% adopted

Ashoka Industrial Fastners, Ludhiana vs. DCIT Central Cirlce-3, Ludhiana

In the result, the appeal is partly allowed

ITA 1139/CHANDI/2025[2019-20]Status: DisposedITAT Chandigarh29 Dec 2025AY 2019-20

For Appellant: \nShri Sudhir Sehgal, AdvocateFor Respondent: Shri Manav Bansal, CIT, DR

Section 145(3)Section 147

unjustified in substituting the\ndeclared results and applying an arbitrary GP rate. In absence of any rejection of\nbooks, estimation of income by enhancing GP is unsustainable in law. Therefore,\neven assuming (without admitting) that the alleged figures represent unrecorded\nsales, only the declared net profit rate ... deployment of managerial,\nadministrative, and infrastructural resources, and the taxation of the entire gross\nprofit would therefore result in an excessive and unrealistic estimation of income.\n9.1 At the same time, we find force in the contention of the Revenue that the\nnet profit rate of 1.35% adopted

“estimation of income”

Leading authorities on estimation of income

Judgments citing estimation of income

Anil Kumar Jain, Raipur vs. Assistant Commissioner of Income Tax, Central

Anil Kumar Jain, Raipur vs. Assistant Commissioner of Income Tax, Central

DCIT, Central Circle 7(1), Mumbai vs. Subhkaran & Sons, Mumbai

DCIT, Central Circle 7(1), Mumbai vs. Subhkaran & Sons, Mumbai

DCIT, Central Circle 7(1), Mumbai vs. Subhkaran & Sons, Mumbai

DCIT, Central Circle 7(1), Mumbai vs. Subhkaran & Sons, Mumbai

DCIT, Central Circle 7(1), Mumbai vs. Subhkaran & Sons, Mumbai

Subhkaran and Sons, Mumbai vs. DCIT, Central Circle 7(1), Mumbai

Subhkaran and Sons, Mumbai vs. DCIT, Central Circle 7(1), Mumbai

Subhkaran and Sons, Mumbai vs. DCIT, Central Circle 7(1), Mumbai

Subhkaran and Sons, Mumbai vs. DCIT, Central Circle 7(1), Mumbai

Subhkaran and Sons, Mumbai vs. DCIT, Central Circle 7(1), Mumbai

Rainbow Vanijya Pvt Ltd., New Delhi vs. ACIT, Kolkata

Integrated Service Point Ltd., Chennai vs. ACIT, Central Circle-2(4), Chennai

ACIT, Chennai vs. Integrated Service Point Limited, Anna Nagar

G S Automobiles Private Limited, Delhi vs. DCIT, Central Circle-6, Delhi

Hardayal Milk Products Private Limited, Shikohabad vs. DCIT, Circle-2(2)(1), Firozabad

Ashoka Industrial Fastners, Ludhiana vs. DCIT Central Circle 3, Lduhiana

Ashoka Industrial Fastners, Ludhiana vs. DCIT Central Circle-3, Ludhiana

Ashoka Industrial Fastners, Ludhiana vs. DCIT Central Cirlce-3, Ludhiana