Best judgment turnover estimation based on past history is valid after account rejection; later non-taxability cannot alter earlier years.

After rejection of the account books, turnover may be estimated to the best of judgment on relevant material, including past history, and that approach is legally sustainable. Non-taxability in subsequent years does not retrospectively govern earlier assessment years, so later findings cannot invalidate an estimation made for the years in dispute. On these principles, the revisional interference was not justified; the revisional order was set aside and the turnover was directed to be redetermined in accordance with law, with costs awarded to the Revenue.

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Issues: (i) Whether, after rejection of the account books, the turnover could be determined to the best of judgment on the basis of past history; (ii) whether non-taxability in subsequent years could justify treating the assessee as non-taxable for the assessment years in dispute.

Issue (i): Whether, after rejection of the account books, the turnover could be determined to the best of judgment on the basis of past history.

Analysis: Once the account books were rejected, the assessing authority had jurisdiction to determine turnover to the best of judgment. Past history was a relevant consideration in making such estimation, and the approach adopted by the assessing and appellate authorities on that basis did not suffer from legal error.

Conclusion: The turnover could validly be determined on the basis of past history after rejection of the account books, and the finding on this issue was in favour of Revenue.

Issue (ii): Whether non-taxability in subsequent years could justify treating the assessee as non-taxable for the assessment years in dispute.

Analysis: The fact that the assessee was found non-taxable in later years could not operate retrospectively to affect the assessment years under consideration. The revising authority was not justified in setting aside the estimation on that ground.

Conclusion: Non-taxability in subsequent years did not control the assessments for the years in dispute, and this issue was decided in favour of Revenue.

Final Conclusion: The revisional order was set aside and the turnover was directed to be determined afresh in accordance with law, with costs awarded to the Revenue.

Ratio Decidendi: After rejection of account books, turnover may be determined to the best of judgment on relevant material such as past history, and later findings of non-taxability cannot retrospectively govern earlier assessment years.

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