Best judgment assessment cannot extend suppression estimates beyond proved unaccounted transactions without evidence of a recurring pattern.

Where inspection discloses suppression only for a limited period, turnover cannot be estimated on mere assumption for a longer span unless a continuing pattern of suppression is established. Best judgment assessment may be used when accounts are not accepted, but additions must remain confined to the actual unaccounted transactions proved by the material on record. Here, the suppression was shown only for the period detected on inspection, and the higher estimate based on an assumed recurring practice was not upheld.

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Issues: Whether, in the absence of any established pattern of suppression, the assessing authority could estimate turnover suppression for a period beyond the actual suppression detected and make additions in excess of the unaccounted transactions found during inspection.

Analysis: The inspection and recovery of records showed suppression only for a limited period. The material did not establish that the same suppression continued for a longer period or that a recurring pattern of suppression existed. In such circumstances, while a best judgment assessment may be permissible where accounts are not accepted, the addition cannot be extended on mere assumption beyond the actual suppression proved.

Conclusion: The addition was confined to the actual suppression found for the period from 1 April 1991 to 23 August 1991, and the higher estimate sustained by the appellate authorities was not upheld.

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