Turnover enhancement requires supporting material; rejected books alone cannot justify increasing disclosed turnover after a clean survey.

Where a survey yields no adverse material and books produced later disclose no discrepancy, rejection of the accounts cannot by itself justify enhancement of turnover. Although the accounts may be rejected in those circumstances, turnover enhancement requires supporting material. The notes state that the enhancement was unsustainable and that the disclosed turnover was accepted in favour of the assessee.

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Issues: Whether turnover could be enhanced and books of account rejected where no adverse material was found during survey and the books subsequently produced disclosed no discrepancy.

Analysis: The books were unavailable at the time of survey but were produced thereafter. As the survey disclosed no adverse material and no discrepancy was found in the subsequently produced books, rejection of the books could not support an enhancement of turnover. The precedent applied permits rejection of accounts in such circumstances but not turnover enhancement without supporting material.

Conclusion: The enhancement of turnover was unsustainable; the disclosed turnover was accepted, in favour of the assessee.

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