Books of account rejection upheld where survey-stage cash verification was withheld and turnover challenge lacked supporting material.

Books of account may be rejected where the assessee's refusal to allow verification of cash in the till during survey gives rise to a credible doubt about the correctness of the cash balance reflected in the accounts. On that basis, the High Court treated rejection of the books as justified. The assessee's challenge to the turnover determination also failed because no material was produced to show that the turnover was excessive or arbitrary. The finding therefore favoured the Revenue on both the rejection of books and the related turnover issue.

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Issues: Whether the books of account could be rejected solely because the assessee did not allow the Surveying Officer to count the cash in the till during the survey.

Analysis: The assessee's books were rejected on the ground that the cash in the till could not be verified at the time of survey. The Court noted that non-production of the cash for verification at the survey stage creates a suspicion that the cash balance may not tally with the accounts maintained. On that basis, the rejection of books was treated as justified. The challenge to the quantum of turnover also failed as no material was shown to prove that it was excessive or arbitrary.

Conclusion: The books of account were validly rejected on the stated ground, and the finding was in favour of the Revenue.

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