Assessee is engaged in manufacturing and trading of jewellery. The assessee-company derived income from manufacture and trading of jewellery. Books of the assessee were audited by an independent chartered accountant and the audit report and statement of profit and loss account were filed by the assessee. Assessee had deposited cash of Rs. 12.17 Crores during demonetization period. Assessee claimed that cash deposited out of cash sales, realisation from debtors and advances from customers.  During assessment-AO rejected the books of accounts and made addition of Rs. 12.17 Crores by treating the same as unexplained cash credit u/s. 68 r.w.s. 115BBE of the Act. In first appeal, CIT(A) deleted the addition of Rs. 12.17 Crores made by the AO u/s. 68 of the Act. However, upheld the rejection of books of account and the estimation of net profit at the rate of 2.59% as against 2.36% declared by the assessee. The AO had verified the purchases, assessee had submitted stock records, all the details required to prove the sales made by the assessee were provided in the assessment proceedings. As regards the receipt of cash from customers such amount standing in the books of account of the assessee would not attract section 68.There was no fault in the detailed reasoned finding in the order of the Commissioner (Appeals). No Show Cause Notice u/s. 144 / 145 of the Act was issued to the assessee and assessment was completed vide Order u/s. 143(3) and not u/s. 144. Further, rejection of the books of account on the basis of insignificant defects in all respects, was not justified and the books of account deserved to be accepted. the CIT(A) had examined the genuineness of purchases from parties and found it to be genuine. Thus, when all the purchases were genuine which have been verified by the AO u/s. 133(6) and which have been correctly recorded in the books of account as well as the stock register, the books of account could not have been rejected under section 145(3) of the Act. Before invoking the provisions of section 145(3) of the Act, the Assessing Officer has to bring on record material on the basis of which he has arrived at the conclusion with regard to correctness or completeness of the accounts of the assessee or the method of accounting employed by it. The instant was not a case where the assessee had not followed either the cash or mercantile system of accounting. The assessee maintained proper books of account audited by a chartered accountant and the profits could have been derived from the audited books of account. (AY 2017-18)