Rejection of accounts cannot rest on electricity consumption variation alone without corroborative evidence of unreliability.

Regularly maintained accounts cannot be rejected merely because electricity consumption varies; the department must show by strong and sufficient reasons that the accounts are unreliable, incorrect or incomplete. Rejection of accounts and best judgment assessment are distinct steps, and a variation in power use alone is not a safe basis for disbelieving the books where it may be explained by machine efficiency, product quality, moisture content or power fluctuations. On the stated facts, the rejection of accounts was not legally justified and an assessment based solely on electricity consumption could not be sustained in favour of the assessee.

---

---

Issues: Whether the assessee's accounts could be rejected and the turnover estimated to the best of judgment solely on the basis of variation in electricity consumption.

Analysis: Regularly maintained accounts cannot be rejected lightly. The department must establish, by strong and sufficient reasons, that the accounts are unreliable, incorrect or incomplete. Rejection of accounts and best judgment assessment are distinct steps. Variation in electricity consumption, by itself, may be explained by factors such as machine efficiency, quality or moisture content of copra, and fluctuations in power supply. Without corroborative circumstances, such variation is not a safe basis for disbelieving the accounts.

Conclusion: The rejection of the accounts was not legally justified, and the assessment based solely on electricity consumption could not be sustained. The decision went in favour of the assessee.

---