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The issue involved in the present appeal relates to the rejection of books of account of the assessee u/s 145(3) of the Act and estimation of gross profit earned.

Shanti Prime Publication Pvt. Ltd.

Section 145 of the Income-tax Act, 1961—Method of accounting— Merely because of adoption of an incorrect method of valuation or merely on account of non compliance with the prescribed accounting standard, the books of accounts cannot be rejected, infact in such cases the correct accounting standard or the correct method of accounting should be applied by the Revenue and the true and correct profits determined and such defects, relating to method of valuation of stock, do not render the books of accounts unreliable, incorrect or incomplete, in which circumstances alone the Books of accounts can be rejected and on the contrary such defects can be cured and the taxable profits determined by applying the correct method of accounting/valuation - PARAMOUNT IMPEX V/s ACIT - [2020] 183 ITD 556 (ITAT-CHANDIGARH)