AO cannot reject entire books of accounts on insignificant defects having minuscule impact on profit

Brief of the Case ITAT Ahmedabad held In the case of The ACIT vs. Garden Silk Mills Ltd. that rejection of books of accounts should not be in a mechanical manner. The AO has to come to a definite conclusion that the accounts are not correct or not complete; consequently, it has distorted the true picture of profit. The AO is required to make analysis of each item and factor which has impact on the profit of the assessee. If a particular item of account is found to be not correct or complete, the AO is required to find out its impact on the profit of the assessee, if it is found that there is n...