Best judgment turnover estimation upheld where accepted affidavit and lack of proof of suppressed sales supported the factual finding

A factual estimate of taxable turnover based on material evidence will not be disturbed in revision unless it is unsupported by evidence or otherwise illegal. Where the assessee's affidavit satisfactorily explains non-production of sale bills and records, and the revenue fails to prove suppressed turnover or that a special discount is a benami device, the fact-finding authority may prefer the disclosed sale prices as the sounder basis for best judgment assessment. On those materials, adding 15 per cent to book sales was upheld and the revenue challenge failed.

---

---

Issues: Whether the Tribunal was justified in estimating the taxable turnover of Indian-made foreign liquor on the basis of the assessee's books of account with an addition of 15 per cent, after accepting the explanation for non-production of the sale bills and books and rejecting the Revenue's case of suppressed turnover and inadmissible special discount.

Analysis: The books of account had already been found unreliable and best judgment assessment was warranted, but the Tribunal accepted the assessee's affidavit explaining why the sale bills and connected records were not produced. That affidavit constituted material evidence. The Tribunal also found that the department had not established by acceptable evidence that the special discount was a benami device or that the assessee had actually suppressed turnover. The Tribunal treated the question of allowance of special discount and the choice of estimate as matters of fact on the materials before it, and held that the disclosed sale prices furnished a sounder basis for estimation than the additions made by the assessing authority. In revision, interference was not justified unless the finding was unsupported by evidence or otherwise illegal or irrational.

Conclusion: The Tribunal's estimate of turnover by taking the book sales and adding 15 per cent was upheld, and the Revenue's challenge failed.

Final Conclusion: The revision petitions were rejected because the Tribunal's factual finding on turnover estimation was supported by evidence and did not disclose any error of law.

Ratio Decidendi: A factual estimate of turnover made by the final fact-finding authority on the basis of material evidence, including an accepted explanation for non-production of records, will not be interfered with in revision unless it is shown to be unsupported by evidence or otherwise illegal.

---