Account books rejection and stock register defect: technical non-maintenance sustained rejection, but disclosed turnover remained accepted.

The rejection of an assessee's account books was examined in light of higher electricity consumption, a fall in turnover, and non-maintenance of the stock register under Section 12(2). Higher electricity consumption and decline in turnover were not treated as sufficient grounds by themselves to reject the books, but the failure to maintain the stock register was regarded as a valid basis for sustaining rejection, even though the defect was technical and related only to part of the year after the amendment. At the same time, the disclosed turnover was directed to be accepted despite that defect.

---

---

Issues: Whether the rejection of the assessee's account books could be sustained, and whether the disclosed turnover was liable to be accepted despite the defect in maintenance of the stock register.

Analysis: The account books were rejected on the basis of higher electricity consumption, decline in turnover, and failure to maintain the stock register required under Section 12(2) of the Act. Higher electricity consumption and decline in turnover, by themselves, were not accepted as sufficient grounds to reject the books. The failure to maintain the stock register, though technical and relating to only part of the year after the amendment of Section 12(2), was treated as a valid basis for sustaining the rejection of the account books. At the same time, the defect was treated as technical in nature for the purpose of the disclosed turnover.

Conclusion: The rejection of the account books was upheld, but the disclosed turnover was directed to be accepted.

---