#rejection of books

The ITAT Jaipur deleted a Rs. 40.82 lakh addition for unexplained cash deposits, ruling that mere deviations in cash sales or bank deposits-even amid demonetization-are insufficient to reject duly audited books of accounts. This reinforces that tax authorities must identify specific, material defects in accounting records, not rely on speculative patterns, protecting compliant businesses from arbitrary assessments.

The ITAT Kolkata ruled that the Assessing Officer cannot disallow purchases and make a blanket addition merely because the assessee failed to respond to Section 133(6) notices. The burden lies on the department to identify concrete discrepancies in the books, not to penalize silence. This protects taxpayers from arbitrary assessments and reinforces procedural fairness in income tax scrutiny.