Best-judgment assessment requires nexus with the relevant year; later-period suppressions cannot justify earlier-year enhancement.

Books of account maintained on a Diwali-year basis could not be rejected for suppressions discovered in a later period, because a best-judgment assessment must have a rational nexus with the relevant assessment year. Where the only suppression relied upon arose from a slip relating to dates in April 1970, falling in the subsequent year, it could not justify rejecting the earlier year's accounts or enhancing turnover for assessment year 1969-70. The Tribunal was therefore correct to annul the enhancement.

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Issues: Whether the Tribunal was right in holding that the books of account maintained on Diwali year basis could not be rejected for suppressions found in a later period and that the enhancement for the assessment year 1969-70 was liable to be annulled.

Analysis: The assessment was made to the best of judgment, but such assessment must rest on a rational nexus with the relevant assessment period. The suppressions relied upon were found from a slip relating to dates in April 1970, which fell in the subsequent year, and not in the previous year for which enhancement was made. A later-period suppression cannot furnish the foundation for rejecting accounts and enhancing turnover for an earlier assessment year.

Conclusion: The Tribunal was correct in holding that the books of account should not have been rejected on the basis of the subsequent-period suppressions and that the enhancement for assessment year 1969-70 was rightly annulled.

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