Best judgment assessment cannot arbitrarily exceed seized account material when the records are genuine and exhaustive.

In a best judgment assessment, an estimate of suppressed turnover must bear a reasonable nexus to the material actually available and cannot be enlarged on mere guesswork. Where seized secret accounts are found to be genuine and exhaustive, and no further accounts exist, the taxing authority has no basis to make an additional arbitrary enhancement beyond that material. The Tribunal's enhanced estimate of suppression was therefore not justified and was rejected, with the questions answered against the Revenue and in favour of the assessee.

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Issues: Whether the Tribunal could enhance the estimate of suppressed turnover beyond the amount found from the seized secret accounts, and whether such enhanced estimate was legally sustainable.

Analysis: The secret accounts seized from the business premises were found to be genuine and exhaustive, and the finding was that no further accounts existed. Once the entire material reflecting the true transactions was before the taxing authorities, there was no scope for making an additional estimate of suppression on mere guesswork. A best judgment assessment must have a reasonable nexus with the available material and cannot be used to impose a punitive or arbitrary enhancement beyond that material.

Conclusion: The enhanced estimate made by the Tribunal was not justified and was liable to be rejected. The questions were answered against the Revenue and in favour of the assessee.

Ratio Decidendi: In a best judgment assessment, an estimate of suppression must be grounded in the material available and cannot exceed it arbitrarily where the seized accounts are found to be genuine and exhaustive.

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