Rejection of account books based on incomplete survey stock record was unsustainable; disclosed turnover had to be accepted.

The rejection of an assessee's account books cannot be sustained merely because the stock register was incomplete at the time of survey. The survey material did not support the Tribunal's assumed physical verification or its reliance on a figure of 8,168 fully manufactured containers, and the record showed that some goods were still semi-finished when the survey began. On that basis, the finding of suppression of manufactured stock was unsustainable, and the turnover disclosed by the assessee had to be accepted.

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Issues: Whether the rejection of the assessee's account books and the consequent disturbance of the turnover disclosed for the assessment year 1982-83 were justified on the basis of the survey material.

Analysis: The account books had been rejected on the basis of a survey report, but the mere fact that the stock register was not complete at the time of survey did not, by itself, justify rejection of the disclosed turnover. The Tribunal's reliance on an assumed physical verification and on an alleged figure of 8,168 fully manufactured containers was not supported by the survey record. The material showed that the survey had commenced during the day and that some containers were still in semi-finished condition, so the assessee could not be faulted for not disclosing their number as fully manufactured goods. In these circumstances, the finding that the assessee had suppressed the correct manufactured stock could not be sustained.

Conclusion: The rejection of the account books on the stated ground was not justified, and the turnover disclosed by the assessee was liable to be accepted. The assessee succeeded.

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