Rejection of accounts requires strong evidence; electricity consumption variation alone cannot justify best judgment assessment.

Regularly maintained accounts cannot be rejected unless strong and sufficient reasons show that they are unreliable, incorrect, or incomplete, and rejection of accounts is distinct from making a best judgment assessment. Variation in electricity consumption by itself was not a safe basis to infer falsity or suppression, because output may fluctuate due to voltage conditions, machinery condition, and moisture content of copra. The department's own acceptance of consumption in the range of 10 to 12 units per quintal further weakened any inference of suppression. On these facts, rejection of the accounts was not legally justified and the assessee's accounts had to be accepted.

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Issues: Whether the accounts of the assessee could be rejected and the assessment made to the best of judgment solely on the basis of variation in electricity consumption.

Analysis: Regularly maintained accounts cannot be rejected unless there are strong and sufficient reasons showing that they are unreliable, incorrect or incomplete. Rejection of accounts and best judgment assessment are distinct steps. The mere fact that electricity consumption varied from month to month, without any further supporting material, was not a safe basis for concluding that the accounts were false or incomplete, since output may vary because of factors such as voltage fluctuations, the condition of the machinery and the moisture content of the copra. The circumstance that the department itself had accepted consumption in the range of 10 to 12 units per quintal also weakened the inference of suppression.

Conclusion: The rejection of the accounts was not legally justified, and the assessee's accounts were required to be accepted.

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