Best judgment assessment must rest on disclosed material; unexplained turnover reduction was unsustainable.

In a best judgment assessment based on undisclosed sales and purchases found during survey, the estimate must rest on relevant material and bear a reasonable nexus to the facts; it cannot be reduced or enhanced by arbitrary guesswork. The Tribunal noted that the undisclosed transactions related only to a limited period, but it further reduced the escaped turnover without disclosing the material or reasoning for that estimate. Because no basis was shown for the revised figures, the order failed to meet the legal requirements governing best judgment assessment and was set aside.

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Issues: Whether the Tribunal's reduction of escaped turnover in a best judgment assessment, without disclosing the basis for the estimate, was sustainable.

Analysis: The assessing authority had made a best judgment assessment on the footing of undisclosed sales and purchases detected during survey. The Tribunal recorded that the undisclosed transactions were confined to a limited period and that enhancement for a longer period was unjustified, yet it reduced the turnover further without indicating the material or reasoning used for that exercise. In a best judgment assessment, the estimate must be founded on relevant material and must bear a reasonable nexus to the facts of the case; it cannot rest on arbitrary guesswork or caprice. Since the Tribunal's order disclosed no basis for the reduced figures, it failed to satisfy the legal requirements governing such assessment.

Conclusion: The Tribunal's order was unsustainable and was set aside.

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