Best judgment assessment requires a reasonable nexus with discovered suppression, not automatic year-wide extrapolation.

In a best judgment assessment, detected suppression does not have to be extrapolated to the entire assessment year in every case. The estimate must maintain a reasonable nexus with the material actually discovered, and the assessing authority or appellate fact-finder may confine the addition to the period supported by evidence on record. There is no legal compulsion to spread a single detected suppression across the whole year if the facts justify a narrower estimation. On those facts, the Tribunal was justified in limiting the enhancement to the supported period, and the principle operated in favour of the dealer.

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Issues: Whether, in a best judgment assessment, the assessing authority was bound to extend the detected suppression to the whole assessment year, or whether the addition could be confined to a part of the year on the facts and circumstances of the case.

Analysis: The assessment was made on best judgment after rejection of the dealer's return and detection of suppression. The question was whether the estimation had to cover the entire year merely because some suppression was found, or whether the authority could confine the addition to the period for which material existed. The governing principle is that a best judgment estimate must have a reasonable nexus with the facts discovered, but the choice of the period and the quantum remains within the discretion of the assessing authority or appellate fact-finding body, depending on the material on record. There is no legal compulsion that the suppression detected on a particular occasion must be extrapolated to the whole year in every case.

Conclusion: The Tribunal was justified in confining the enhancement to the period supported by the available material. The answer was therefore in favour of the dealer and against the Revenue.

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