Rejection of books of account for failure to maintain...

Rejection of books of account for failure to maintain quality-wise diamond stock records requires material showing that the accounts are incorrect or incomplete. The note states that absence of particulars such as size, clarity, colour and shape, without specific defects in books, registers, inventory, vouchers or primary documents, does not justify invoking section 145(3). It further notes that consistently followed accounting methods, supported by stock valuation reports and audit records and accepted in other scrutiny assessments, undermine a best-judgment profit estimate lacking a rational basis. On these stated facts, the rejection of books was treated as unsustainable and the consequential estimated-profit addition was deleted.