Best judgment assessment cannot justify arbitrary income enhancement when rejected books are unsupported by relevant material.

Best judgment assessment must rest on relevant material and a reasoned application of judgment; rejection of the assessee's books as unreliable does not, by itself, justify an arbitrary enhancement of income. Where the enhancing authority gave no basis for the increase and the appellate tribunal merely affirmed that approach without addressing the limited scope of best judgment assessment, the enhancement could not stand. The High Court was right to set aside the appellate orders, and the assessee's relief was maintained.

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Issues: Whether the assessing authority and the appellate authority were justified in enhancing the assessee's agricultural income on a best judgment basis when the books produced were found unreliable, and whether the High Court was right in interfering with that enhancement.

Analysis: The power to make a best judgment assessment is not arbitrary and must rest on some relevant material. Mere rejection of the assessee's books as unreliable does not, by itself, authorise enhancement of income at large. The order enhancing the assessment disclosed no basis or reasoning for the increase, and the appellate tribunal also affirmed that approach without addressing the limited scope of best judgment assessment.

Conclusion: The enhancement of assessment was unjustified, and the High Court was correct in setting aside the orders of the appellate authorities.

Final Conclusion: The appeals failed, and the relief obtained by the assessee was maintained.

Ratio Decidendi: A best judgment assessment must be founded on relevant material and reasoned application of judgment, and cannot be sustained as an arbitrary enhancement merely because the assessee's accounts are rejected.

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