Books of account cannot be rejected for one year based only on other years; defects must be shown in the relevant accounts.

Rejection of an assessee's books of account for a particular assessment year requires material showing defects or unreliability in those accounts themselves. The books for the relevant year were maintained with full details and no discrepancy was found, so rejection could not be justified merely because books of an earlier year had been rejected or because a later survey produced adverse material. A separate claim regarding packing material did not amount to nondisclosure of sales. In the absence of any defect in the records for the year under review, the adverse inference rested on assumption rather than evidence, and the rejection of the books was not sustainable.

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Issues: Whether the rejection of the assessee's books of account for the assessment year in question was justified on the basis of alleged non-disclosure of certain sales and circumstances relating to other years.

Analysis: The account books for the relevant year were found to have been maintained with full details and no discrepancy was detected in them. Rejection could not be sustained merely because the books of an earlier year had been rejected or because a later survey yielded adverse material, since each assessment year must be considered independently. A claim that certain items were not included in taxable turnover as packing material was not the same as non-disclosure. In the absence of defects in the books for the year under consideration, the inference that they were unreliable rested only on assumption and not on material.

Conclusion: The rejection of the books of account was not justified and the finding against the assessee could not be maintained.

Ratio Decidendi: Rejection of books of account for a particular assessment year cannot be supported by inference from other years alone; there must be material showing defects or unreliability in the accounts of the relevant year itself.

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