Rejection of account books does not nullify an accepted factual finding; declared firing period of 94 days had to be applied.

Rejection of the account books was upheld because the authorities relied not only on the absence of profit and loss account, cash book and ledger, but also on non-production at survey and discrepancies in stock, sales and firing period. Once the books were rejected, the disclosed selling rate and cash memos based on them were not conclusive, so the assessing authority could fix a higher selling rate on assessment material. However, the Tribunal's reasoning showed that the declared firing period of 94 days had been accepted, and the reference to 100 days was treated as an inadvertent error. The turnover was therefore to be recomputed on the basis of 94 firing days.

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Issues: (i) whether rejection of the account books was justified; (ii) whether the disclosed selling rate could be disturbed after rejection of the account books; (iii) whether the firing period had to be taken as 94 days as declared by the dealer.

Issue (i): whether rejection of the account books was justified.

Analysis: Rejection was not founded merely on non-maintenance of profit and loss account, cash book, or ledger. The authorities also relied on the failure to produce account books at the time of survey and on discrepancies between the stock found, the sales disclosed, and the firing period declared. The concurrent finding of rejection was therefore supported by material and did not suffer from legal infirmity.

Conclusion: The rejection of the account books was upheld and was against the assessee.

Issue (ii): whether the disclosed selling rate could be disturbed after rejection of the account books.

Analysis: Once the account books were rejected, the cash memos and the disclosed selling rate based on those books could not be treated as conclusive. In such a situation, the assessing authority was entitled to determine the selling rate on the basis of assessment material. The authority relied upon for the assessee was distinguishable on facts because the cash memos there had not been disbelieved.

Conclusion: The adoption of a higher selling rate was sustained and was against the assessee.

Issue (iii): whether the firing period had to be taken as 94 days as declared by the dealer.

Analysis: The Tribunal's own reasoning showed that it intended to accept the declared firing period and not to substitute a different figure merely because the account books were rejected. The use of the figure 100 days appeared to be an inadvertent mistake or omission. The declared firing period of 94 days was therefore required to be accepted.

Conclusion: The firing period had to be taken as 94 days and this issue was decided in favour of the assessee.

Final Conclusion: The revision succeeded only to the limited extent of correcting the firing period, and the turnover was required to be recomputed on the basis of 94 firing days.

Ratio Decidendi: Rejection of account books does not authorise disregard of a factual finding that the appellate authority or Tribunal has otherwise accepted; where the Tribunal's reasoning supports the declared figure, an apparent clerical or inadvertent error in recording that figure must be corrected in revision.

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