Best judgment assessment – Assessing Officer must act honestly

Bengal Shelter Housing Development Limited Vs ITO (ITAT Kolkata) ITAT held that section 144 of the Income Tax Act, 1961 authorizes the Assessing Officer to determine the income of an assessee on the basis of his best of the judgment. It is pertinent to observe that in making a best judgment assessment the Ld. Assessing Officer must not act dishonestly or vindictively. He must make what he honestly believes to be a fair estimate of proper figure of assessment and for this purpose he must be able to take into consideration local knowledge, business of the assessee and his own knowledge of the pr...