Best judgment assessment cannot rest on speculation; an unsupported turnover estimate based on one bill was unsustainable.

Best judgment assessment under Section 21(2) cannot rest on a wholly arbitrary estimate. The assessing authority relied on a single bill dated 14 February 1999 and, without supporting material, assumed 113 further transactions at the same value to estimate escaped turnover at 10,00,000. That method had no rational foundation because it was based only on the bill number and unsupported assumptions of identical prior sales. An estimation exercise may involve guesswork, but it must still be reasonable and cannot be founded on surmises or conjectures. The turnover estimate was therefore unsustainable, and the revision succeeded in favour of the assessee.

---

---

Issues: Whether the escaped turnover could be estimated at Rs. 10,00,000 on the basis of a solitary bill numbered 114 and whether such estimation was sustainable in a best judgment assessment under Section 21(2) of the 1948 Act.

Analysis: The only material relied upon was one bill dated 14 February 1999 for Rs. 60,770. On that basis the assessment assumed 113 additional transactions and treated each as having the same value as the solitary bill. Such a presumption had no rational foundation. While best judgment assessment permits a degree of estimation and guesswork, it does not authorise a wholly whimsical or arbitrary computation. An estimate resting solely on the bill number and on unsupported assumptions about identical prior transactions was based on surmises and conjectures and could not be approved.

Conclusion: The turnover estimate was unsustainable and the revision succeeded in favour of the assessee.

---