Rejection of books of account: requires specific, pinpointed defects; absence of stock register alone is insufficient.
Section 145 allows computation of business income by cash or mercantile methods and authorises the AO to reject books under Section 145(3) if accounts are incorrect or incomplete; however, rejection requires identification of specific defects or omissions. Absence of quantitative stock registers, some vouchers, or a lower gross profit ratio compared with prior years does not, by itself, justify rejecting books or making ad hoc best judgment additions where books otherwise provide a fair and verifiable result. (AI Summary)