defects in the books of accounts - sec.145

[vsaiyar]

Before rejection of books of accounts the assessing Officer should point out specific defects in the books of accounts resulting in non verifiability of the book results.  Suppression  of sales, overstatement of purchases, inflation of expenses these are the modes used for falsification of accounts.  But these are not visible from the books but has to come from sources outside the books.  The question arises whether the books and averments of third parties could be used against the assessee.  The AO has to rely either on the books of accounts of the assessee or the books of the third party or reject both the books.  Could the AO use selectively the books of the third party?

[sai prasad]

the officer can use third party material ,if it is relevant,only after giving an opportunity to the assessee for his objections or otherwise. If he uses behind the back of the assessee,the same is untenable.