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Bangalore ITAT Slashes Estimated Profit from 15% to 7% – Best Judgment Assessment Cannot Be a “Blind Guess”
Case Law Details
- Case Name
- Kempaiah Kemparaju Vs DCIT (ITAT Bangalore)
- Appeal Number
- Only available for paid members
- Date of Judgement/Order
- Only available for paid members
- Related Assessment Year
- 2017-18
- Courts
- All ITAT, ITAT Bangalore
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Kempaiah Kemparaju Vs DCIT (ITAT Bangalore)
In a significant ruling, the Bangalore ITAT held that best judgment assessment u/s 144 cannot be based on mere suspicion, arbitrary assumptions or “wild guesswork.” The Tribunal reduced the AO’s estimated profit rate from 15% to 7% in the case of a civil contractor whose receipts were entirely from Government/PWD contracts through banking channels with TDS deductions.
The assessee had not filed returns for AYs 2013-14 and 2017-18 despite contract receipts exceeding ₹17 crore. The AO completed reassessment ex parte u/s 147 r....
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