Survey-based turnover enhancement requires year-specific evidence; earlier years could not be reopened without independent incriminating material.

A survey conducted in assessment year 1987-88, without independent incriminating material, could not justify enhancement of turnover and tax liability for earlier assessment years 1984-85, 1985-86 and 1986-87; the additions for those years were therefore unsustainable. For assessment year 1987-88, however, the survey related to the relevant period and the material found during that survey provided the factual basis for enhancement, so the addition for that year was upheld. The governing principle is that turnover enhancement for a particular year must rest on evidence relevant to that year, and a later survey cannot, by itself, support reopening or enhancement of prior years.

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Issues: (i) Whether a survey conducted in assessment year 1987-88, without any other incriminating material, could justify enhancement of turnover and tax liability for the earlier assessment years 1984-85, 1985-86 and 1986-87; (ii) Whether the enhancement of turnover and tax liability for assessment year 1987-88 based on the survey material was sustainable.

Issue (i): Whether a survey conducted in assessment year 1987-88, without any other incriminating material, could justify enhancement of turnover and tax liability for the earlier assessment years 1984-85, 1985-86 and 1986-87.

Analysis: The revisions showed that the only basis for disturbing the disclosed turnover for the earlier years was a survey conducted on 28 November 1987. No independent material indicating suppression of sales or incorrect disclosure for the prior assessment years was referred to by the authorities. In the absence of such material, the survey could not be treated as evidence for reopening or enhancing turnover for years preceding the survey.

Conclusion: The enhancement for assessment years 1984-85, 1985-86 and 1986-87 was unsustainable and the assessee succeeded on this issue.

Issue (ii): Whether the enhancement of turnover and tax liability for assessment year 1987-88 based on the survey material was sustainable.

Analysis: For assessment year 1987-88, the survey itself related to the relevant period and the materials noticed during the survey formed the basis of the addition. On that footing, the factual foundation for enhancement existed for the year in which the survey was conducted.

Conclusion: The enhancement for assessment year 1987-88 was upheld and the assessee failed on this issue.

Final Conclusion: The revisions succeeded for the earlier assessment years because the turnover could not be enhanced in their absence of supporting material, but the revision for the year covered by the survey was rejected, leaving the assessee partly successful overall.

Ratio Decidendi: A survey made in one assessment year cannot, by itself and without independent incriminating material, justify enhancement of turnover for earlier assessment years; such enhancement must rest on evidence relevant to the years in question.

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