Rejection of books of account requires specific defects; mere absence during survey is not enough if later produced.

Books of account cannot be rejected merely because they were not available at the time of survey if they are later produced and no specific defect, discrepancy, suppression, or unreliability is shown. Where the assessment rests only on non-production during survey and the authorities do not record any concrete infirmity in the books or stock position, best judgment assessment is unsustainable. The Tribunal, as final fact-finding authority, must consider the assessee's objections on merits and give a reasoned finding rather than rely only on the earlier appellate conclusion. The HC set aside the Tribunal's order and directed reconsideration on merits.

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Issues: Whether the rejection of the assessee's books of accounts and the consequent best judgment assessment were justified merely because the books were not found at the time of survey.

Analysis: The assessment and appellate authorities proceeded on the footing that no books of accounts were found at the premises during survey and that the stock verification could not be reconciled, while the assessee's books were later produced and there was no independent finding of any specific defect, discrepancy, or suppression in those books. Rejection of accounts may be justified where the books do not reflect true , stock does not tally, or there is material indicating unreliable trading results; however, non-production of books at the time of survey by itself is not enough to discard the accounts when they are subsequently produced and no concrete deficiency is recorded. The tribunal, being the final fact-finding authority, was required to examine the assessee's objections and return a reasoned finding on the merits instead of resting only on the earlier appellate conclusion.

Conclusion: The rejection of books of accounts solely on the ground of their absence during survey was unsustainable, and the matter required fresh consideration by the tribunal.

Final Conclusion: The revision succeeded and the tribunal's order was set aside with a direction for reconsideration on merits.

Ratio Decidendi: Books of accounts cannot be rejected merely because they were not available at the time of survey if they are later produced and no specific defect, discrepancy, or unreliability is established.

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