Rejection of books and best-judgment income estimation upheld where stock records and dissolution claim were unsubstantiated.

The books of account were rejected because the assessee failed to produce effective replies and supporting records such as stock movement details, inventory valuation, invoices, customer particulars, and bank statements to verify the return and audited results. The claim that the entire inventory had to be cleared on winding up and dissolution also remained unsubstantiated, and the record did not show a valid dissolution. On that basis, estimation of income from dead-stock clearance sales was justified, and the reduced estimation made in appeal was not disturbed.

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Issues: Whether rejection of the books of account and the consequential estimation of income from dead-stock clearance sales was justified.

Analysis: The assessee did not produce effective replies to notices, nor did it place on record the stock movement details, inventory valuation, invoices, customer particulars, bank statements, or other documentary evidence to establish the correctness and completeness of the return and audited results. The claim that the entire inventory had to be disposed of because of winding up and dissolution remained unsubstantiated, and the record did not support the plea that the firm had validly dissolved. In these circumstances, the authorities were justified in rejecting the books and estimating income to the best of judgment. The reduced estimation made in appeal also did not call for further interference.

Conclusion: The rejection of books and the consequential estimation of income were upheld, and the assessee's challenge failed.

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