“estimation of income”

Assessment ProceduresSection 145Section 1453,061 judgments

The decision most relied on for estimation of income is CIT v. Simit P. Sheth (356 ITR 451), cited in 1,465 judgments on BharatTax.

Leading authorities on estimation of income

CIT v. Simit P. Sheth

356 ITR 451 · 2013 · High Court

1,465

citing judgments

When purchases are unproved or presumed to be from the grey market, the entire amount of such purchases should not be disallowed; instead, income can be estimated by applying a reasonable gross profit rate to the unaccounted sales or turnover, especially in assessments arising from search proceedings involving seized documents.

Rotork Controls India Pvt. Ltd. v. CIT

314 ITR 62 · 2009 · Supreme Court

739

citing judgments

A provision for expenses, such as warranty, is a deductible liability for income tax purposes if it constitutes a present obligation arising from past events, and a reliable estimate of the amount of obligation is possible.

Sanjay Oilcake Industries v. CIT

316 ITR 274 · 2009 · High Court

460

citing judgments

In cases of alleged bogus or unverifiable purchases, rather than disallowing the entire purchase value, a reasonable profit element or a proportionate percentage of the purchases should be added back to the assessee's income.

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.

CIT v. Devi Prasad Vishwanath Prasad

72 ITR 194 · 1969 · Supreme Court

272

citing judgments

If there is an unexplained cash credit, the Assessing Officer can treat it as the assessee's income, even when the income is finalized on an estimation basis, without proving its specific source. The onus then shifts to the assessee to prove that the income represented by the cash credit has already been taxed.

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. Balchand Ajit Kumar

263 ITR 610 · 2003 · High Court

212

citing judgments

When making an addition for unaccounted receipts, on-money, or non-genuine purchases/sales, the addition should be restricted to the estimated profit element embedded in such transactions, rather than the entire gross amount, particularly when evidence of corresponding expenditure is incomplete. This estimation often involves applying a net profit rate.

Harigopal Singh v. CIT

258 ITR 85 · 2002 · High Court

203

citing judgments

Penalty under section 271(1)(c) cannot be levied when an addition to income is made on an estimated basis without concrete evidence of concealment or furnishing inaccurate particulars of income. The provisions of section 271(1)(c) are not attracted to cases where income is assessed on an estimate basis.

Judgments citing estimation of income

M/S.Aquapure Agencies, Mumbai vs. ITO 28(1)(1), Mumbai

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

ITA 5408/MUM/2018[2009-10]Status: DisposedITAT Mumbai14 Oct 2019AY 2009-10

Bench: Shri Mahavir Singh & Shri G. Manjunatha

Section 133(6)Section 143(3)Section 147

scaled down estimation of profit to 20% on total alleged bogus purchase. Although, both authorities have taken different rate of profit for estimation of income for alleged bogus purchase, but no one could support said rate of gross profit with necessary evidences or any comparable cases. Therefore, considering facts

ACIT Circle 22(1), Mumbai vs. Bharoomal & Co, Mumbai

In the result, appeal filed by the revenue is dismissed

ITA 5356/MUM/2018[2007-08]Status: DisposedITAT Mumbai14 Oct 2019AY 2007-08

Bench: Shri Mahavir Singh & Shri G. Manjunathaacit,Circle-22(1) Vs. Bharoomal & Co. Room No.322, 3Rd Floor 1 & 2, Narsing Co-Op. Soc. 4Th Road, Khar (West) Income Tax Office Piramal Chambers,Lalbaug Mumbai-400 052 Parel, Mumbai-400 012

Section 143(3)Section 147

scaled down estimation of profit to 12.50% on total alleged bogus purchase. Although, both authorities have taken different rate of profit for estimation of income from alleged bogus purchase, but no one could support said rate of gross profit with necessary evidences or any comparable cases. Therefore, considering facts

ACIT, Circle-3(1), Vijayawada vs. Sri Bhaskar Contractors Company, Vijayawada

In the result, appeals of the revenue for the A

ITA 432/VIZ/2017[2012-2013]Status: DisposedITAT Visakhapatnam04 Oct 2019AY 2012-2013

Bench: Shri V. Durga Rao& Shri D.S. Sunder Singhआयकरअपीलसं./I.T.A.No.109/Viz/2013 (निर्धारणवर्ा/Assessment Year : 2008-09) Asst.Commissioner Of Vs. M/S Sri Bhaskar Contractors Income Tax Company Circle-3(1) D.No.60-3-27, F.No.101 Vijayawada Sai Aniketh Apartment Iti Bus Stop, Ashok Nagar Vijayawada [Pan : Aaqfs5687P] (अपीलार्थी/ Appellant) (प्रत्यर्थी/ Respondent) Cross Objection No.70/Viz/2013 (Arising Out Of I.T.A. No.109/Viz/2013) M/S Sri Bhaskar Contractors Asst.Commissioner Of Company Income Tax D.No.60-3-27, F.No.101 Circle-1(1) Sai Aniketh Apartment Vijayawada Iti Bus Stop, Ashok Nagar Vijayawada [Pan : Aaqfs5687P] (अपीलार्थी/ Appellant) (प्रत्यर्थी/ Respondent)

For Appellant: Shri P.V.Subba Rao, ARFor Respondent: Shri D.K.Sonowal, CIT DR

Section 131Section 143(1)Section 143(2)Section 143(3)

Production of original vouchers are not practicable and possible in this case. The assessee also requested for rejection of books of accounts and estimation of income reasonably. From the above discussion, it is clear that the assessee has not maintained the proper books of account and expenses debited ... No.109/Viz/2013, CO No.70/Viz/2013, A.Y. 2008-09 and I.T.A. No.432/Viz/2017, A.Y.2012-13 M/s Sri Bhaskar Contractors Company, Vijayawada for rejection of books of accounts and estimation of income. Therefore, taking into consideration of all the facts and merits of the case and basis from KNR Constructions of ITAT Hyderabad Bench, we hold

ACIT., Circle - 1(1), Vijayawada vs. M/S Sri Bhaskar Contractors Company

In the result, appeals of the revenue for the A

ITA 109/VIZ/2013[2008-2009]Status: DisposedITAT Visakhapatnam04 Oct 2019AY 2008-2009

For Appellant: Shri P.V.Subba Rao, ARFor Respondent: Shri D.K.Sonowal, CIT DR

Section 131Section 143(1)Section 143(2)Section 143(3)

Shri Anil Kothari (HUF), Surat vs. The Dy.CIT, Circle- 6, Surat

In the result, the appeal of the assessee stands allowed

ITA 2645/AHD/2013[2007-08]Status: DisposedITAT Surat04 Oct 2019AY 2007-08

Bench: Shri Amrjit Singh & Shri O.P.Meenaआ.अ.सं".I.T.A No.2048/Ahd/2010 & 2645/Ahd/2013 "नधा"रण वष"Assessment Year:2007-08 1. Deputy Commissioner Of बनाम 1. Sri Anil J Kothari Proprietor Of Income-Tax, Circle -6, Surat. M/S. Arpit Exports, G-01, Vs. Vithrag Chambers, 7/1407 Thoba Sheri, Surat. 2. Sri Anil J Kothari Proprietor Of 2. Deputy Commissioner Of M/S. Arpit Exports, G-01, Income-Tax, Circle -6, Surat. Vithrag Chambers, 7/1407 Thoba Sheri, Surat. "था. ले. सं./Pan No.: Aacha 4940 H अपीलाथ" Appellant ""यथ"/Respondent "नधा"रती क" ओर से /Assessee By Shri Prakash Jhunjhunwala, C.A. राज"व क" ओर से /Revenue By Shri Mayank Pandey, Sr. D.R.

For Respondent: 2. Ground No.1 as amended by the Revenue states that Ld. CIT (A) has erred in de

Section 133(6)Section 271(1)(c)

counsel for the assessee Further, submitted the Special Bench in the case of Manoj Agarwal v. DCIT [2008] 113 ITD 377 (Del) has estimated commission income at 0.50% for giving accommodation entries by holding the CIT (A) was justified in estimating net commission at 0.355 after allowing 0.15% for expenses ... counsel for the assessee Further, submitted the Special Bench in the case of Manoj Agarwal v. DCIT [2008] 113 ITD 377 (Del) has estimated commission income at 0.50% for giving accommodation entries by holding the CIT (A) was justified in estimating net commission at 0.355 after allowing 0.15% for expenses

Sterling Jewels Pvt. Ltd., Mumbai vs. ACIT 5(3)(2), Mumbai

In the result, appeal filed by the assessee for AY 2009-10 is dismissed

ITA 6154/MUM/2016[2009-10]Status: DisposedITAT Mumbai03 Oct 2019AY 2009-10

Bench: Shri G. Manjunatha & Shri Ram Lal Negiita No.6154, 6155, 6156, 6157 & 6158/Mum/2016 (Assessment Years: 2009-10, 2010-11, 2011-12, 2012-13 & 2013-14) Sterling Jewels Pvt.Ltd. Vs. Acit-5(3)(2) 208, A-Z Industrial Estate 460, Aaykar Bhawan Ganpatrao Kadam Marg M.K.Road, Churchgate Lower Parel (W) Mumbai-400 020 Mumbai-400 013 Pan/Gir No.Aajcs3316D (Appellant) .. (Respondent)

Section 143(1)Section 143(3)Section 147Section 69C

scaled down estimation of profit to 3% on total alleged bogus purchase. Although, both authorities have taken different rate of profit for estimation of income from alleged bogus purchase, but no one could support said rate of gross profit with necessary evidences or any comparable cases. On the other hand

ACIT, Jaipur vs. M.R.K.Pipes Ltd., Jaipur

ITA 636/JPR/2019[2013-14]Status: DisposedITAT Jaipur02 Oct 2019AY 2013-14

For Appellant: Shri S.L. Poddawr, AdvocateFor Respondent: Shri Vimlendu Verma , (CIT) fu/kZkfjrh dh vksj ls@

Section 271(1)(c)

into consideration the decisions of Hon'ble Rajasthan High Courts in the case of Shri Shiv Lal Tak wherein it was held that ‘’Estimation of income is neither a case of addition nor disallowance but it is a case of substitution on which penalty

Shri Radha Mohan Vijay, Jaipur vs. Assistant Commissioner of Income Tax, Circle-5, Jaipur

In the result, appeal of the assessee in ITA No

ITA 1172/JPR/2018[2010-11]Status: DisposedITAT Jaipur02 Oct 2019AY 2010-11

For Appellant: Shri S.R. Sharma (CA) &For Respondent: Shri A.K. Mahela (JCIT)

Section 139(1)Section 143(1)Section 145(3)Section 148

assessment year 2010-11. On appeal, the ld. CIT (A) has restricted the addition by estimating the income of the assessee at 20% GP for both the assessment years. Aggrieved by the impugned order of ld. CIT (A), the assessee filed these appeals. 3. I have heard ... assessee of preceding years. 6. There is no dispute that after rejection of books of account, the AO is required to estimate the income on the best judgment and consequently some reasonable and proper basis should have been applied for estimation of the income after rejection of books of account

Shri Radha Mohan Vijay, Jaipur vs. Assistant Commissioner of Income Tax, Circle-5, Jaipur

In the result, appeal of the assessee in ITA No

ITA 1171/JPR/2018[2009-10]Status: DisposedITAT Jaipur02 Oct 2019AY 2009-10

For Appellant: Shri S.R. Sharma (CA) &For Respondent: Shri A.K. Mahela (JCIT)

Section 139(1)Section 143(1)Section 145(3)Section 148

Shri Hari Prasad Vijay, Jaipur vs. Assistant Commissioner of Income Tax, Circle-5, Jaipur

In the result, the appeals of the assessee are allowed

ITA 1047/JPR/2018[2010-11]Status: DisposedITAT Jaipur02 Oct 2019AY 2010-11

For Appellant: Shri S.R. Sharma (CA) &For Respondent: Shri A.K. Mahela (JCIT)

Section 139(1)Section 143(1)Section 145(3)Section 148

Appeals) has applied GP rate at 19% without giving any basis whereas the assessee’s own past history was not considered while estimating the income of the assessee. He has further contended that the assessee is an exporter and once the export of goods are not denied, then the corresponding ... Prasad Vijay, Jaipur. export sale. Thus the ld. A/R has contended that after rejection of books of account, the AO was required to estimate the income of the assessee on the basis of some reasonable and proper basis. He has referred to various decisions of this Tribunal including the decision

M/S. Shiv Pujan Developers, Kalol vs. The Income Tax Officer, Ward-3, Mehsana

In the result, appeal of the assessee is partly allowed

ITA 399/AHD/2017[2012-13]Status: DisposedITAT Ahmedabad01 Oct 2019AY 2012-13

Bench: Shri Rajpal Yadav & Shri Amarjit Singh"नधा"रण वष"/ Asstt.Year: 2012-13 M/S.Shiv Pujan Develpers Ito, Ward-3 Mehsana. C/O. Jigneshkuamr Purushottambhai Vs. Patel, Abf-12, First Floor, Shivam Plaza Borisana Three Road Opp: Borisana Petrol Pump Kalol (N.G.)-382 721. Pan : Abtfs 2833 H

For Appellant: Shri Tushar Hemani, ARFor Respondent: Shri Alok Singh, CIT-DR

Section 133ASection 143(2)

having accepted that such income could not exceed Rs.26 lakhs out of total receipt of Rs.62 lakhs, no interference is called for, since estimation of income could not give rise to any substantial question of law. 8. In support of his contentions, the counsel relied on several decisions, reference

ITO - 27 (1)(1), Mumbai vs. Amit Chandulal Mehta, Mumbai

In the result, appeal filed by the revenue is dismissed

ITA 5729/MUM/2018[2009-10]Status: DisposedITAT Mumbai01 Oct 2019AY 2009-10

Bench: Shri G. Manjunatha & Shri Ram Lal Negiito-27(1)(1) Vs. Amit Chandulal Mehta 4Th Tower No.6, Floor, A-4/43A, Shantiniketan Roomno.406 Chs, Lbs Marg Vashi Railway Station Complex Ghatkopar(W), Mumbai-400 Vashi, Navi Mumbai 086

Section 143(3)Section 147

Ld.CIT(A) has scaled down addition to 12.50% profit on total alleged bogus purchase. Although, both authorities have taken different view for estimation of income from alleged bogus purchase, but no one could support said method with necessary evidences or any comparable cases. Therefore, considering facts and circumstances of this

Income Tax Officer, Ward-3(3), Mumbai vs. Shri Mahendra B Gandhi, Mumbai

In the result, appeal filed by the revenue is dismissed

ITA 5310/MUM/2018[2009-10]Status: DisposedITAT Mumbai01 Oct 2019AY 2009-10

Bench: Shri G. Manjunatha & Shri Ram Lal Negi

Section 143(3)Section 147

Motury Kanakeswara Rao, Eluru vs. The Income Tax Officer, Ward-1, Eluru

In the result, appeals filed by the assessee are dismissed

ITA 513/VIZ/2018[2003-04]Status: DisposedITAT Visakhapatnam27 Sept 2019AY 2003-04

Bench: Shri V. Durga Rao, Hon’Ble & Shri D.S. Sunder Singh, Hon’Ble

For Appellant: Shri G.V.N. Hari – AdvocateFor Respondent: Smt. Suman Malik – Sr.DR

Section 154

case to condone the delay. Accordingly, delay is condoned. 3. The only issue involved in this appeal relates to estimation of income in respect of leased fish tanks consequent direction given by the ld. CIT(A) passed by the Assessing Officer dated 07/07/2015 constitutes mistake apparent on record ... this case, ld. CIT(A) by order dated 22/05/2015 directed the Assessing Officer to estimate the income of the leased fish tanks subject to produce the evidence by the assessee. The assessee has not produced sufficient evidence to establish that he has taken fish tanks on lease, therefore, the Assessing

Motury Kanakeswara Rao, Eluru vs. The Income Tax Officer, Ward-1, Eluru

In the result, appeals filed by the assessee are dismissed

ITA 512/VIZ/2018[2002-03]Status: DisposedITAT Visakhapatnam27 Sept 2019AY 2002-03

Bench: Shri V. Durga Rao, Hon’Ble & Shri D.S. Sunder Singh, Hon’Ble

For Appellant: Shri G.V.N. Hari – AdvocateFor Respondent: Smt. Suman Malik – Sr.DR

Section 154

M/S Chemicals India, Kota vs. Joint Commissioner of Income Tax, Kota

In the result, the appeal of the assessee is partly allowed

ITA 92/JPR/2018[2010-11]Status: DisposedITAT Jaipur27 Sept 2019AY 2010-11

For Appellant: Shri Siddharth Ranka (Advocate)For Respondent: Shri A.K. Mahela (JCIT)

Section 145(3)Section 234B

dispute that the past history i.e. the GP/NP declared by the assessee is the proper and reasonable basis and guidance for estimation of income of the assessee for the year under consideration. Instead of making the assessment by considering the provisions of section 145(3) read with section

Shri Sohan Nath, Ajmer vs. Income Tax Officer, Ajmer

In the result, appeal of the assessee is allowed in part

ITA 8/JPR/2018[2013-14]Status: DisposedITAT Jaipur25 Sept 2019AY 2013-14

For Appellant: Shri Mahendra Gargieya (Adv)For Respondent: Shri A.K. Mahla (JCIT)

Section 143(3)Section 145(3)Section 44A

further erred in law as well as on the facts of the case in confirming the action of the AO in estimating the income of plying of trucks at Rs.3,50,000/- as against the income of Rs.2,15,000/- declared by the appellant. The assessee had already shown ... revised return of income was belated and invalid treated as nonest by the A.O. then the A.O. was having only option to estimate the income of the assessee from liquor business. The assessee offered the income from liquor business of Rs. 4,68,895/- to tax at the time

Vijaykumar P Kheria, Mumbai vs. DCIT CC 3(3), Mumbai

In the result, the appeals filed by the assessee are allowed

ITA 5676/MUM/2018[2010-11]Status: DisposedITAT Mumbai25 Sept 2019AY 2010-11

Bench: Shri C.N. Prasad () & Shri N.K. Pradhan () Assessment Year: 2010-11 & Assessment Year: 2011-12 & Assessment Year: 2012-13 Mr. Vijay Kumar R. The Dy. Commissioner Of Kheria, A-21, Adarsh Vs. Income Tax-Central Circle- Regal, Adarshdugdhalaya, 3(3), Room No. 1923, Air Off. Marve Road, Malad, India Building, Nariman (W), Mumbai-400064 Point, Mumbai-400021. Pan No. Agfpk3758C Appellant Respondent

For Appellant: Mr. Hari S. Raheja, ARFor Respondent: Ms. Samatha Mullamudi, DR

Section 132Section 143(3)Section 153ASection 271(1)(c)

Court in the case of Kalindi Rail Nirman Engg. Ltd. 51 taxmann.com 523 (Delhi) wherein levy of penalty on the additions made by estimating the income of the assessee by applying rate of 11% (agreed by the assessee) on the gross receipts has been upheld. Thus, the contention ... distinguishable from the instant case on the reason that the assessee herein has not agreed for any estimation of income. 7. We have heard the rival submissions and perused the relevant materials on record. The reasons for our decisions are given below. The ITAT ‘G’ Bench, Mumbai in assessee

S.Ravi, Cuddalore vs. ACIT Central Circle 2(1), Chennai

In the result, all the appeals of assessee are partly allowed for statistical purposes

ITA 1027/CHNY/2019[2015-16]Status: DisposedITAT Chennai24 Sept 2019AY 2015-16

Bench: Shri George Mathan & Shri Inturi Rama Raoआयकर अपील सं./Ita No.1021 To 1027/Chny/2019 "नधा"रण वष" /Assessment Year: 2009-10 To 2015-16

For Respondent: Mr.Salendra Mammidi

Section 132Section 144Section 145(3)Section 153ASection 153DSection 271ASection 44A

invoked the provisions of section 145(3) of the Act and rejected the books of accounts as maintained by the assessee and estimated the income of assessee at 9% of the gross receipts by applying the principles of section 44AD of the Act. It was submitted that in the course ... filed an appeal before the ld.CIT(A). It was submitted that ld.CIT(A) had in his impugned order under appeal reduced the estimation of income to 7% from 9% as estimated by the Assessing Officer. It was submitted that no estimation was liable to be made. It was submitted that

S.Ravi, Cuddalore vs. ACIT Central Circle 2(1), Chennai

In the result, all the appeals of assessee are partly allowed for statistical purposes

ITA 1026/CHNY/2019[2014-15]Status: DisposedITAT Chennai24 Sept 2019AY 2014-15

Bench: Shri George Mathan & Shri Inturi Rama Raoआयकर अपील सं./Ita No.1021 To 1027/Chny/2019 "नधा"रण वष" /Assessment Year: 2009-10 To 2015-16

For Respondent: Mr.Salendra Mammidi

Section 132Section 144Section 145(3)Section 153ASection 153DSection 271ASection 44A