Unverifiable purchases and missing stock records justified rejection of books and income estimation under tax law.

Unverifiable purchases, failure to produce suppliers despite summons, and absence of a quantitative stock register justified rejection of the books of account. The assessee did not discharge the statutory burden of proving the genuineness of purchases and liabilities, and the unreliable basis for closing stock valuation supported the inference that the claimed purchases were not fully genuine. On these accounting defects, the best judgment approach to income estimation was properly invoked, and the trading addition sustained by the first appellate authority was upheld against the assessee.

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Issues: Whether the rejection of books of account and the trading addition based on unverifiable purchases and absence of quantitative stock details was justified.

Analysis: The purchases from a substantial portion of the turnover could not be verified, the assessee failed to produce the concerned parties despite summons, and no quantitative stock register or reliable basis for closing stock valuation was maintained. In such circumstances, the statutory onus to establish genuineness of purchases and liabilities was not discharged, and the surrounding circumstances supported the inference that the claimed purchases were not fully genuine. The defect in books justified invocation of the best judgment approach under the income-tax law.

Conclusion: The rejection of books of account and the addition sustained by the first appellate authority were upheld, against the assessee.

Final Conclusion: The appeal failed because the assessee did not establish the genuineness of the disputed purchases and the accounting defects justified estimation of income.

Ratio Decidendi: Where purchases remain unverifiable and the assessee fails to maintain reliable stock records or discharge the burden of proving genuineness, the books of account may be rejected and income estimated on a reasonable basis.

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