Turnover enhancement requires factual basis; accepted books and stock register cannot be rejected solely for missing manufacturing accounts.

Taxable turnover could not be enhanced merely because manufacturing accounts were not maintained when the books of account and stock register were accepted and no material stock discrepancy was proved. The tribunal had found as fact that the assessee's explanation on job work was acceptable and that the stock position in the registers was reliable. In that setting, rejection of the accounts or enhancement of turnover on the sole ground of absent manufacturing accounts lacked a legal and factual basis, and the disclosed turnover had to be accepted.

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Issues: Whether taxable turnover could be enhanced merely because manufacturing accounts were not maintained, when the books of account and stock register were accepted and no material stock discrepancy was established.

Analysis: The Tribunal had recorded findings of fact in favour of the assessee, including acceptance of the explanation regarding job work and acceptance of the stock position as reflected in the registers. In that situation, mere non-maintenance of manufacturing accounts did not by itself justify rejection of the accounts or enhancement of turnover. The increase made only on that basis, without a supporting legal or factual foundation, was unsustainable.

Conclusion: The enhancement of taxable turnover was not justified and the assessee's disclosed turnover had to be accepted.

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