Pepper estate books of account cannot be rejected solely on prior estimated yield and minor unsegregated receipts.

The Tribunal could not reject the pepper estate books merely by comparing the disclosed yield with an earlier year's best judgment estimate, because a prior estimated yield is not a safe benchmark and pepper output may vary materially from year to year. The assessee's failure to separately show small receipts from paddy and miscellaneous produce was also insufficient, where the rubber accounts were accepted and there was no omission, accounting defect, irregularity, or positive evidence of suppression. The reference was answered in favour of the assessee, and rejection of the pepper accounts was held unjustified.

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Issues: Whether the Tribunal was justified in rejecting the assessee's books of account relating to the pepper estate and confirming the estimated yield of pepper on the basis adopted by the assessing authorities.

Analysis: The only substantive issue was the rejection of the pepper accounts. The comparison made by the Tribunal between the disclosed yield and the previous year's estimated yield was not a valid basis for rejecting the accounts, since a prior best judgment estimate cannot by itself discredit the later year's books. In pepper cultivation, yield may vary materially from year to year, so the earlier estimate did not furnish a safe benchmark. The additional circumstance that the assessee had not separately shown small amounts of income from paddy and miscellaneous produce was also insufficient to justify rejection of the pepper accounts, particularly when the rubber accounts were accepted and no omission, irregularity, defect in accounting method, or positive evidence of suppression was shown.

Conclusion: The Tribunal was not justified in rejecting the books of account relating to the pepper estate, and the question referred was answered in the negative, in favour of the assessee.

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