← All Phrases

“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 Robust Transportation Private Limited, Mumbai vs. Income Tax Officer, Ward 15(3)(1), Mumbai

In the result, the appeal of the assessee is allowed

ITA 4803/MUM/2025[2017-18]Status: DisposedITAT Mumbai11 Dec 2025AY 2017-18

Bench: SHRI AMIT SHUKLA (Judicial Member), SHRI VIKRAM SINGH YADAV (Accountant Member)

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

authorities, faced with unexplained interest-free advances, come to the conclusion that interest income has been suppressed, they are entitled to estimate such income on a reasonable basis, and that recourse to RBI lending benchmarks is neither arbitrary nor unlawful. Summarising his conclusions, the learned CIT(A) held that ... lending products. It has no statutory force for the purpose of determining accrual of income in the hands of a non-banking assessee. Estimation of income has its place where income is otherwise found to have accrued but its exact quantum is 14 Robust Transportation Pvt. Ltd., uncertain; it cannot

DCIT Central Circle-4(3), Kolkata vs. Balmukund Lease Fin Private Limited, Patna

The appeal of the Revenue is dismissed

ITA 1759/KOL/2025[2020-21]Status: DisposedITAT Kolkata09 Dec 2025AY 2020-21
Section 115JSection 132Section 147Section 148Section 69A

Iron Private Limited; A.Y. 23-24\nwere only done in order to inflate the sales of the assessee. The Id. AO\nmade adhoc estimation of income of 4% of the purchases made from\nthese parties thereby making an addition of ₹2,97,52,993/- to the\nincome of the assessee

DCIT, Central Circle-4(3), Kolkata vs. Balmukund Cement & Roofings Private Limited, Kolkata

The appeal of the revenue is dismissed

ITA 1703/KOL/2025[2020-21]Status: DisposedITAT Kolkata09 Dec 2025AY 2020-21

Bench: Shri Rajesh Kumar, Am & Shri Pradip Kumar Choubey, Jm

For Appellant: Shri Manish Rastogi, ARFor Respondent: Shri Pankaj Pandey, DR
Section 115JSection 132Section 147Section 148Section 69A

undisclosed sales of the assessee. The ld. CIT(A) has treated the said transactions as suppressed sales and accordingly applied GP rate to estimate the income thereon. Thus, ld. CIT(A) partly sustained the addition of Rs. 22,54,000/- by deleting the addition to the extent ... Iron Private Limited; A.Y. 23-24 were only done in order to inflate the sales of the assessee. The ld. AO made adhoc estimation of income of 4% of the purchases made from these parties thereby making an addition of ₹2,97,52,993/- to the income of the assessee

DCIT, Central Circle-4(3), Kolkata vs. Balmukund Cement & Roofings Private Limited, Kolkata

The appeal of the revenue is dismissed

ITA 1702/KOL/2025[2018-19]Status: DisposedITAT Kolkata09 Dec 2025AY 2018-19

Bench: Shri Rajesh Kumar, Am & Shri Pradip Kumar Choubey, Jm

For Appellant: Shri Manish Rastogi, ARFor Respondent: Shri Pankaj Pandey, DR
Section 115JSection 132Section 147Section 148Section 69A

undisclosed sales of the assessee. The ld. CIT(A) has treated the said transactions as suppressed sales and accordingly applied GP rate to estimate the income thereon. Thus, ld. CIT(A) partly sustained the addition of Rs. 22,54,000/- by deleting the addition to the extent ... Iron Private Limited; A.Y. 23-24 were only done in order to inflate the sales of the assessee. The ld. AO made adhoc estimation of income of 4% of the purchases made from these parties thereby making an addition of ₹2,97,52,993/- to the income of the assessee

DCIT, Central Circle-4(3), Kolkata vs. Balmukund Cement & Roofings Private Limited, Kolkata

The appeal of the Revenue is dismissed

ITA 1701/KOL/2025[2017-18]Status: DisposedITAT Kolkata09 Dec 2025AY 2017-18
Section 115JSection 132Section 147Section 148Section 69A

Iron Private Limited; A.Y. 23-24\nwere only done in order to inflate the sales of the assessee. The Id. AO\nmade adhoc estimation of income of 4% of the purchases made from\nthese parties thereby making an addition of ₹2,97,52,993/- to the\nincome of the assessee

DCIT, Central Circle-4(3), Kolkata vs. Balmukund Cement & Roofings Private Limited, Kolkata

The appeal of the revenue is dismissed

ITA 1699/KOL/2025[2015-16]Status: DisposedITAT Kolkata09 Dec 2025AY 2015-16

Bench: Shri Rajesh Kumar, Am & Shri Pradip Kumar Choubey, Jm

For Appellant: Shri Manish Rastogi, ARFor Respondent: Shri Pankaj Pandey, DR
Section 115JSection 132Section 147Section 148Section 69A

undisclosed sales of the assessee. The ld. CIT(A) has treated the said transactions as suppressed sales and accordingly applied GP rate to estimate the income thereon. Thus, ld. CIT(A) partly sustained the addition of Rs. 22,54,000/- by deleting the addition to the extent ... Iron Private Limited; A.Y. 23-24 were only done in order to inflate the sales of the assessee. The ld. AO made adhoc estimation of income of 4% of the purchases made from these parties thereby making an addition of ₹2,97,52,993/- to the income of the assessee

Deputy Commissioner of Income Tax, Central Circle-4(3), Kolkata vs. Balmukund Sponge and Iron Private Limited, Patna

The appeal of the Revenue is dismissed

ITA 1598/KOL/2025[2018-19]Status: DisposedITAT Kolkata09 Dec 2025AY 2018-19
Section 115JSection 132Section 147Section 148Section 69A

accommodation entries and these\nPage 12\nwere only done in order to inflate the sales of the assessee. The Id. AO\nmade adhoc estimation of income of 4% of the purchases made from\nthese parties thereby making an addition of ₹2,97,52,993/- to the\nincome of the assessee

Deputy Commissioner of Income Tax, Central Circle-4(3), Kolkata vs. Balmukund Sponge and Iron Private Limited, Patna

The appeal of the revenue is dismissed

ITA 1596/KOL/2025[2016-17]Status: DisposedITAT Kolkata09 Dec 2025AY 2016-17

Bench: Shri Rajesh Kumar, Am & Shri Pradip Kumar Choubey, Jm

For Appellant: Shri Manish Rastogi, ARFor Respondent: Shri Pankaj Pandey, DR
Section 115JSection 132Section 147Section 148Section 69A

undisclosed sales of the assessee. The ld. CIT(A) has treated the said transactions as suppressed sales and accordingly applied GP rate to estimate the income thereon. Thus, ld. CIT(A) partly sustained the addition of Rs. 22,54,000/- by deleting the addition to the extent ... Iron Private Limited; A.Y. 23-24 were only done in order to inflate the sales of the assessee. The ld. AO made adhoc estimation of income of 4% of the purchases made from these parties thereby making an addition of ₹2,97,52,993/- to the income of the assessee

Balmukund Cement & Roofings Pvt. Ltd., Kolkata vs. DCIT, Central Circle 4(3), Kolkata

The appeal of the Revenue is dismissed

ITA 1399/KOL/2025[2023-2024]Status: DisposedITAT Kolkata09 Dec 2025AY 2023-2024
Section 115JSection 132Section 147Section 148Section 69A

Iron Private Limited; A.Y. 23-24\nwere only done in order to inflate the sales of the assessee. The Id. AO\nmade adhoc estimation of income of 4% of the purchases made from\nthese parties thereby making an addition of ₹2,97,52,993/- to the\nincome of the assessee

Balmukund Sponge & Iron Pvt. Ltd., Patna vs. DCIT, Central Circle 4(3), Kolkata

The appeal of the Revenue is dismissed

ITA 1398/KOL/2025[2023-2024]Status: DisposedITAT Kolkata09 Dec 2025AY 2023-2024
Section 115JSection 132Section 147Section 148Section 69A

Iron Private Limited; A.Y. 23-24\nwere only done in order to inflate the sales of the assessee. The Id. AO\nmade adhoc estimation of income of 4% of the purchases made from\nthese parties thereby making an addition of ₹2,97,52,993/- to the\nincome of the assessee

Balmukund Sponge & Iron Pvt. Ltd., Patna vs. DCIT, Central Circle 4(3), Kolkata

The appeal of the Revenue is dismissed

ITA 1397/KOL/2025[2018-2019]Status: DisposedITAT Kolkata09 Dec 2025AY 2018-2019
Section 115JSection 132Section 147Section 148Section 69A

Iron Private Limited; A.Y. 23-24\nwere only done in order to inflate the sales of the assessee. The Id. AO\nmade adhoc estimation of income of 4% of the purchases made from\nthese parties thereby making an addition of ₹2,97,52,993/- to the\nincome of the assessee

Balmukund Sponge & Iron Pvt. Ltd., Patna vs. DCIT, Central Circle 4(3), Kolkata

The appeal of the Revenue is dismissed

ITA 1396/KOL/2025[2017-2018]Status: DisposedITAT Kolkata09 Dec 2025AY 2017-2018
Section 115JSection 132Section 147Section 148Section 69A

Iron Private Limited; A.Y. 23-24\nwere only done in order to inflate the sales of the assessee. The Id. AO\nmade adhoc estimation of income of 4% of the purchases made from\nthese parties thereby making an addition of ₹2,97,52,993/- to the\nincome of the assessee

Balmukund Sponge & Iron Pvt. Ltd., Patna vs. DCIT, Central Circle 4(3), Kolkata

The appeal of the Revenue is dismissed

ITA 1395/KOL/2025[2015-2016]Status: DisposedITAT Kolkata09 Dec 2025AY 2015-2016
Section 115JSection 132Section 147Section 148Section 69A

Iron Private Limited; A.Y. 23-24\nwere only done in order to inflate the sales of the assessee. The Id. AO\nmade adhoc estimation of income of 4% of the purchases made from\nthese parties thereby making an addition of ₹2,97,52,993/- to the\nincome of the assessee

M/S. Kanak Projects Ltd., Kolkata vs. A.C.I.T., Circle - 8(1), Kolkata

In the result, the appeal of the assessee is allowed

ITA 1219/KOL/2025[2017-2018]Status: DisposedITAT Kolkata08 Dec 2025AY 2017-2018

Bench: Shri Sonjoy Sarmam/S Kanak Projects Ltd. Vs Acit, Circle-8(1), Kolkata Salarpuria Jajodia @ Co.7, Chittaranjan Avenue, Kol-72. Pan No. : Aabck1255F (अपीलाथ" /Appellant) .. (""यथ" / Respondent) "नधा"रती क" ओर से /Assessee By : Shri S. Jhajharia, Ar राज"व क" ओर से /Revenue By : Shri Pankaj Pandey, Jcit, Sr. Dr सुनवाई क" तार"ख / Date Of Hearing : 09/09/2025 घोषणा क" तार"ख/Date Of Pronouncement : 08/12/2025 आदेश / O R D E R Per Sonjoy Sarma, Jm : This Appeal By The Assessee Arises Against The Order Dated 09.04.2025 Of The National Faceless Appeal Centre (Hereinafter Referred To As The ‘Cit(A)’) Passed Under Section 250 Of The Income- Tax Act, 1961 (The ‘Act’). 2. Brief Facts Of The Case Are That The Assessee Filed Its Original Return Of Income For The Assessment Year Under Consideration Declaring A Total Income Of ₹99906480. The Assessee Subsequently Filed A Revised Return Declaring The Same Income. The Case Was Selected For Scrutiny & Statutory Notices Under Section 142(1) Were Served. In Response, The Assessee Filed Audited Financial Statements, Computation Of Income, Details Of Receipts & Expenses & Explanations As Called For. From The Tax Audit

For Appellant: Shri S. Jhajharia, ARFor Respondent: Shri Pankaj Pandey, JCIT, Sr. DR
Section 142(1)Section 145(3)Section 2(24)(x)Section 250Section 36(1)(va)

section 145(3) of the Act, the AO cannot estimate income, nor can he apply profit rates based on industry standards. Thus, any estimation of income without rejecting the books is per se unsustainable. Moreover, the assessee had shown the amount of ₹2.5 crore as advance in earlier years

Devaraj Ilavarasan, Salem vs. ITO, Ward-1(6), Salem

Appeal of the assessee is partly allowed

ITA 2444/CHNY/2025[2017-18]Status: DisposedITAT Chennai08 Dec 2025AY 2017-18

Bench: Shri Manu Kumar Giri & Shri S.R.Raghunathaआयकर अपील सं./Ita No.2444/Chny/2025 िनधा"रण वष"/Assessment Year: 2017-18 V. The Ito, Devaraj Ilavarasan, 2/217-C, Siddar Koil Main Road, Ward 1(6), Sivathapuram, Salem 636 307. Salem. [Pan: Abopi2465G] (अपीलाथ"/Appellant) (""यथ"/Respondent)

For Appellant: Shri S. Bhupendran, AdvocateFor Respondent: Ms. Gouthami Manivasagam, JCIT
Section 115BSection 133ASection 144

raised multiple grounds, including the assessment order is bad in law and the CIT(A) erred in not appreciating records properly. The estimation of income @ 8% is without basis. Most importantly, in the cases of the assessee’s father Shri D. Devaraj [ITA Nos.689-694/Chny/2024 dated 26.07.2024] and mother Smt. Ellammal

DCIT, Central Circle 7(1), Mumbai vs. Lloyds Steels Industries Limited, Mumbai

ITA 3997/MUM/2025[2015-16]Status: DisposedITAT Mumbai08 Dec 2025AY 2015-16

Bench: Shri Pawan Singh, Jm & Ms Padmavathy S, Am

For Appellant: Shri Vijay Mehta & Shri TarangFor Respondent: Shri Rajesh Kumar Yadav – CIT-
Section 145Section 145(3)Section 250Section 68

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 ... Corporation of India Ltd. (2010) 328 ITR 257 (Delhi), WHARE it was held that the AO's estimation of income was valid in cases of rejection of books of accounts. 10. On facts and circumstances of the case and in law. The Ld. CIT(A) erred in holding that

Lloyds Engineering Works Limited (Earlier Known As Loyds Steels Industries Limited ), Mumbai vs. Assistant Commissioner of Income Tax, Central Circle 7(1), Mumbai

ITA 2857/MUM/2025[2018-19]Status: DisposedITAT Mumbai08 Dec 2025AY 2018-19

Bench: Shri Pawan Singh, Jm & Ms Padmavathy S, Am

For Appellant: Shri Vijay Mehta & Shri TarangFor Respondent: Shri Rajesh Kumar Yadav – CIT-
Section 145Section 145(3)Section 250Section 68

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 ... Corporation of India Ltd. (2010) 328 ITR 257 (Delhi), WHARE it was held that the AO's estimation of income was valid in cases of rejection of books of accounts. 10. On facts and circumstances of the case and in law. The Ld. CIT(A) erred in holding that

ACIT, CC-13, Jhandewalan vs. Sbl Pvt Ltd, Haridwar

In the result, the appeal of the Revenue is dismissed

ITA 4391/DEL/2025[2014-15]Status: DisposedITAT Delhi03 Dec 2025AY 2014-15

Bench: Shri Mahavir Singh & Shri Manish Agarwal[Assessment Year : 2014-15] Vs Acit Sbl Pvt. Ltd. Central Circle-13 Plot No.3, Sector-12, Iie, New Delhi. Sideul, Haridwar, Uttarakhand-249403. Pan-Aaccd0037H Appellant Respondent Revenue By Shri Jitender Singh, Cit Dr Assessee By Shri Shaurya Jain, Adv. Date Of Hearing 03.12.2025 Date Of Pronouncement 03.12.2025 Order Per Manish Agarwal, Am : The Present Appeal Is Filed By Revenue Against The Order Dated 15.04.2025 Passed By Ld. Commissioner Of Income Tax (A)-26, New Delhi [“Ld.Cit(A)”] In Appeal No. 26/10525/17-18 U/S 250 Of The Income Tax Act, 1961 [“The Act”] Arising Out Of Assessment Order Dated 30.12.2016 Passed U/S 143(3) Of The Act Pertaining To Assessment Year 2014-15. 2. Brief Facts Of The Case Are That Assessee Company Engaged In Manufacturing Of Homoeopathy Medicines In India & Has Two Manufacturing Units Situated At Haridwar Which Are Eligible For Deduction U/S 80-Ic Of The Act & Also Has Units At Jaipur & Sahibabad, Which Are Non-Eligible Units. The Assessee Company Filed Its Return Of Income On 29.09.2014, Declaring Total Income Of Inr 18,85,40,940/-. The Case Was Selected For Scrutiny Through Cass & Notice U/S 143(2) Was Issued On 31.08.2015, Followed By Notices U/S 142(1) Alongwith Questionnaire. In Response, Requisite Details & Replies Were From Time To Time. After Considering The Submissions & Replies Filed By The Assessee In Support Of Its Claim, Ao Assessed The Income Of The Assessee Company At Inr 52,74,33,562/- Vide Assessment Order Dated 30.12.2016 Passed U/S 143(3) Of The Act By Making Estimation Of Income At Sahibabad Plant & Further By Making Disallowance Out Of Various Expenses & By Not Allowing The Deduction U/S 80Ic Of The Act.

Section 142(1)Section 143(2)Section 143(3)Section 250Section 80Section 80I

assessee company at INR 52,74,33,562/- vide assessment order dated 30.12.2016 passed u/s 143(3) of the Act by making estimation of income at Sahibabad plant and further by making disallowance out of various expenses and by not allowing the deduction u/s 80IC of the Act. 3. Against

M S Infraengineers (P) Limited, Cuttack vs. ACIT, Circler-2(1), Cuttack

In the result, appeal of the assessee stands partly allowed for statistical purposes

ITA 438/CTK/2024[2013-14]Status: DisposedITAT Cuttack02 Dec 2025AY 2013-14

Bench: Shri George Mathan & Shri Rajesh Kumarआयकर अपील सं/Ita No.438/Ctk/2024 ("नधा"रण वष" / Assessment Year : 2013-14)

For Appellant: Shri Purnendu Bhusan Mohanty, CAFor Respondent: Shri Vijaya Singh, ld Sr DR
Section 145(3)

this appeal three issues are involved. The first issue is in regard to rejection of books of account of the assessee and estimation of income of the assessee at 8%. It was the submission that in 2 regard to rejection of books of account, the assessee is not in dispute ... assessee does not make any profit out of VAT, the Assessing Officer is directed to exclude the VAT from the total turnover when estimating the income of the assessee at 8% of the turn over. In the circumstances, this plea is held in favour of the assessee. 5. The second

ACIT-19(1), Mumbai vs. Parul Diamond, Mumbai

In the result, appeal and cross-objection filed by the revenue as well as the assessee respectively, stands dismissed

ITA 6992/MUM/2024[2007-08]Status: DisposedITAT Mumbai02 Dec 2025AY 2007-08

Bench: Smt. Beena Pillai () & Shri Omkareshwar Chidara ()

Section 37Section 68

when it was observed that GP on these bogus invoices were almost matching with the GP, as per genuine invoices and therefore, such estimation of income out of bogus purchases with GP, as per regular books of accounts is not justified?" 4. " Whether on the facts and circumstances ... case and in law, Ld. CIT(A) has erred in estimating the income of bogus Purchases on the basis of comparing of bogus purchases with the purchases in the regular books of accounts ignoring that the fact of procuring bogus invoices leads to the un¬verified inflation of purchase price