Best judgment assessment requires proof that books are unreliable or incomplete, not merely rejection of an earlier year's accounts.

Rejection of account books and best judgment assessment are justified only when the relevant year's books are shown to be incomplete or unreliable and there is material indicating suppression of sales. An assessment year is a separate and self-contained unit, so accounts for the year in question cannot be rejected merely because an earlier year's accounts were rejected or because part of the accounting period overlaps with the preceding year. On the facts stated, no independent defect in the books was shown and no suppression of sales was established, so best judgment assessment was unwarranted.

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Issues: Whether best judgment assessment was justified on the facts and circumstances of the case.

Analysis: The assessee's accounts could not be rejected merely because a part of the accounting year fell in the preceding assessment year and the earlier year's accounts had been rejected. Each assessment year is a separate and self-contained unit, and the books for the relevant year had to be judged on their own material. No independent defect in the account books was pointed out, and there was no material to show that the accounts were incomplete or unreliable or that sales had been suppressed. Best judgment assessment is permissible only where the books are incomplete or unreliable and there is material indicating suppression of sales.

Conclusion: Best judgment assessment was not justified and the rejection of the assessee's accounts was unwarranted.

Final Conclusion: The reference was answered in favour of the assessee, and the challenge to the best judgment assessment failed.

Ratio Decidendi: Rejection of accounts and best judgment assessment are permissible only when the books are shown to be incomplete or unreliable and there is material indicating suppression of sales; rejection cannot rest merely on rejection of accounts for an earlier year.

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