Rejection of books and best judgment addition sustained where low gross profit and missing production details justified factual interference.

Rejection of books of account was upheld where the assessee failed to produce co-related details of finished products, despite giving raw material sales details, and the gross profit rate was significantly lower than the previous year. On those facts, the assessing authority made a best judgment assessment and the appellate authorities found the trading results justified interference. The Tribunal treated the matter as appreciation of evidence and sustained a lump sum addition. The High Court held that the issue was factual and no substantial question of law arose.

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Issues: Whether the Tribunal's decision upholding rejection of the books of account and sustaining a best judgment addition under section 145(2) of the Income-tax Act, 1961 gave rise to any substantial question of law.

Analysis: The books of account were rejected because the assessee failed to produce co-related details of finished products despite furnishing details of raw material sales, and the gross profit rate for the year was substantially lower than the previous year. The assessing authority, after rejecting the books, made a best judgment assessment and the appellate authorities found, on the material available, that the trading results justified interference. The Tribunal treated the matter as one of appreciation of evidence and sustained a lump sum addition on the facts of the case.

Conclusion: The issue was answered against the assessee; the Tribunal's finding was one of fact and no substantial question of law arose.

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