Rejection of books without specific defects is unsustainable; profit estimation at 8% was deleted.

Rejection of books of account based mainly on non-response to section 133(6) notices and partial non-production of invoices was found unsustainable where the assessee had produced books, invoices, vouchers, e-way bills and transport documents, and no specific defect in the records was identified. The decision held that books cannot be rejected without pointing to a concrete deficiency in the accounts, and an 8% profit estimate on turnover was therefore unjustified. The estimated addition was deleted.

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Issues: Whether the rejection of books of account and estimation of profit at 8% of turnover, based mainly on non-response to notices issued to suppliers and the buyer, was justified.

Analysis: The assessee had furnished books of account, invoices, vouchers, e-way bills, transport documents and other supporting material, and the bulk of sales was to a government corporation. The addition was sustained only because notices issued under section 133(6) were not complied with and some invoices were not produced, but no specific defect or deficiency in the books was pointed out. Rejection of books without identifying any concrete defect was held unsustainable, and the estimate of profit at 8% of turnover was found to be unjustified.

Conclusion: The rejection of books of account was held to be bad in law, the estimated addition was deleted, and the issue was decided in favour of the assessee.

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