Books of account cannot be rejected merely for non-production at survey when no defect is found at assessment.

The maintained books of account could not be rejected merely because they were not produced at the time of survey, where no defect was found in them at assessment. Non-production at survey was explained by the books being kept elsewhere and the kiln having no business activity, which was treated as different from non-maintenance of books. In the absence of any defect in the regular books and registers, no adverse inference was justified, and the assessing authority had to examine the books at assessment before rejecting the book version.

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Issues: Whether the assessee's books of account could be rejected merely because they were not produced at the time of survey, despite there being no defect pointed out in the books at assessment.

Analysis: The assessment record showed that the assessee maintained regular books and registers for the business year. Non-production of the books at the time of survey was explained by the absence of business activity at the kiln and the books having been kept elsewhere. The absence of books at survey was treated as different from non-maintenance of books. Since no defect was found in the maintained books, no adverse inference was warranted merely on the ground of non-production at survey, and the assessing authority was required to examine the books at the assessment stage before rejecting the book version.

Conclusion: The rejection of the book version was unjustified and the assessee succeeded on this issue.

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