Best judgment assessment requires year-specific material; later survey findings cannot alone prove suppression in an earlier year.

A survey can support best judgment assessment only where the recovered material has a real evidentiary nexus with the assessment year in question; material found in a later year cannot, by itself, justify presuming suppression in an earlier year. For 1965-66, the turnover estimate was upheld because the detected suppression covered a continuous period and was supported by cogent material. For 1958-59, discrepancies between returned and disclosed sales provided material to reject the accounts, but for 1959-60 no contemporaneous suppressed transaction or connecting basis was shown, so rejection of the books for that year was not justified.

---

---

Issues: (i) whether a survey conducted in a later assessment year could be relied upon to presume suppression of turnover for an earlier assessment year; (ii) whether the turnover estimate made for the assessment year 1965-66 was supported by material and could be sustained as a best judgment assessment; and (iii) whether there was material for rejecting the accounts version for the assessment years 1958-59 and 1959-60.

Issue (i): whether a survey conducted in a later assessment year could be relied upon to presume suppression of turnover for an earlier assessment year.

Analysis: The relevance of a survey depends on the dates and nature of the transactions discovered, not merely on the date of the survey itself. Where the materials recovered from the survey related only to transactions within the later year, and there was no finding that they pertained to the earlier year or disclosed a carried-forward balance, no presumption of suppression for the earlier year could be drawn. A best judgment assessment must rest on some material, and a mere conjecture that duplicate accounts must have existed in the earlier year is insufficient.

Conclusion: The survey was not relevant for the earlier assessment year and suppression could not be presumed for that year.

Issue (ii): whether the turnover estimate made for the assessment year 1965-66 was supported by material and could be sustained as a best judgment assessment.

Analysis: The suppressed transactions detected by the survey covered a continuous period and were not a stray instance. The estimate was not shown to be arbitrary merely because the detected suppression was confined to a part of the year, since the assessing authority had allowed a margin for seasonal business and the appellate authority had also reduced the addition in part. Once circumstances justified a best judgment assessment, the estimate of turnover was a question of fact, and the revisional finding could be sustained where supported by cogent material and the magnitude of business.

Conclusion: The turnover estimate for the assessment year 1965-66 was valid and was upheld.

Issue (iii): whether there was material for rejecting the accounts version for the assessment years 1958-59 and 1959-60.

Analysis: For the assessment year 1958-59, the discrepancy between sales shown in the accounts and returns and the sales disclosed on the assessee's own statement furnished material to reject the books. For the assessment year 1959-60, however, the rejection rested on surveys conducted in other years, and no suppressed transaction or contemporaneous material was found in the year in question. Findings from other years, without a relevant connecting basis, were not enough to reject the accounts for 1959-60.

Conclusion: Material existed to reject the accounts for 1958-59, but not for 1959-60.

Final Conclusion: The decision upheld the use of best judgment assessment where supported by material, rejected the presumption of suppression for an earlier year on the basis of a later survey alone, and distinguished between years where contemporaneous material for rejection of accounts existed and where it did not.

Ratio Decidendi: A survey or discovered discrepancy can support a best judgment assessment only when it has a real evidentiary nexus with the assessment year in question; suspicion or conjecture cannot replace material evidence.

---