Best judgment assessment requires material discrepancy; unsupported adverse inference cannot displace accepted books of account.

Adverse inference and best judgment assessment could not be sustained where the books of account were produced, no discrepancy was established, and the explanation for the alleged bill irregularity in goods in transit was accepted. The stock issue was supported by recorded stock movements, with no material showing unaccounted purchases or any other basis for fastening tax liability. The Tribunal was therefore not justified in reversing the First Appellate Authority without cogent reasons or supporting evidence, and the assessment could not be restored on that footing.

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Issues: Whether the Tribunal was justified in reversing the First Appellate Authority and sustaining rejection of the account books and best judgment assessment on the basis of alleged discrepancies in bills and stock.

Analysis: The revisionist's books of account were subsequently produced and no discrepancy was pointed out. The alleged discrepancy related to bills for goods in transit, and the explanation that one bill was not carried by the driver and that carbon copy entry was omitted was accepted. The stock was found to have been issued from the recorded stock, and there was no material to show any unaccounted purchase or other basis for fastening tax liability. The Tribunal reversed the First Appellate Authority without cogent reasons or supporting material.

Conclusion: The Tribunal was not justified in drawing adverse inference or restoring the assessment order; the revisionist succeeded.

Final Conclusion: The revision was allowed, the Tribunal's order was set aside, and the First Appellate Authority's order was restored.

Ratio Decidendi: An adverse inference and best judgment assessment cannot be sustained in the absence of material showing unaccounted transactions or discrepancy in the books, and a reasoned finding of the First Appellate Authority cannot be reversed without cogent reasons.

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