Best judgment assessment on unreliable accounts: omission of material purchases and factual appreciation did not raise a referable question of law.

Rejection of the assessee-firm's accounts and the resulting best judgment assessment were treated as matters of factual appreciation, not as referable questions of law. The accounts were found unreliable because of missing stock and profit and loss records, abnormal purchase-sale disparity, and omission of purchases of drums and timber. The alleged error regarding fifteen sleepers did not change the core factual basis, and the challenge to the evidence merely disputed concurrent findings. No legal issue capable of reference arose, and the application for reference was rejected.

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Issues: (i) whether the rejection of the assessee-firm's accounts and the resulting best judgment assessment gave rise to a question of law warranting a reference; (ii) whether the alleged factual error regarding the entry of fifteen sleepers or the challenge to the sufficiency of the evidence created any referable question of law.

Issue (i): Whether the rejection of the assessee-firm's accounts and the resulting best judgment assessment gave rise to a question of law warranting a reference.

Analysis: The accounts were found unreliable on multiple factual grounds, including the absence of proper stock and profit and loss records, abnormal disparity between purchases and sales, and omission of entries relating to purchased drums and timber. The dispute therefore turned on appreciation of accounts and evidentiary facts, not on any legal principle. Section 13(1) had no application to scrutiny of past accounts in the manner suggested, and the best judgment assessment was supported by material on record.

Conclusion: No referable question of law arose on this issue, and the challenge failed.

Issue (ii): Whether the alleged factual error regarding the entry of fifteen sleepers or the challenge to the sufficiency of the evidence created any referable question of law.

Analysis: The supposed mistake about fifteen sleepers did not alter the core factual basis that timber purchases were omitted from the books, along with other purchases of drums and timber. The grievance was at most against factual appreciation. The additional challenge to the evidence merely questioned the correctness of the concurrent factual findings and did not disclose any legal issue capable of reference.

Conclusion: No question of law arose from the alleged factual error or from the attack on the evidence, and the issue was decided against the assessee.

Final Conclusion: The application for requiring a reference was rejected because the matter involved concurrent findings of fact and no substantial question of law.

Ratio Decidendi: Omission of material purchases from the accounts, when supported by concurrent factual findings, is a matter of evidentiary appreciation and does not by itself raise a referable question of law for revisional or reference jurisdiction.

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