JUDGMENT

Markandey Katju, J. - Leave granted.

2. This appeal has been filed against the impugned judgment of the Rajasthan High Court dated 25.8.2004 in Income Tax Appeal No.80 of 2004.

3. Heard learned counsel for the parties and perused the record.

4. The facts of the case are in a short compass. The appellant assessee deals in precious and semi precious stones. In the course of assessment the Assessing Officer noticed the following defects in the books of accounts of the assessee :

“1. The assessee has not maintained and kept any quantitative details/stock register for the goods traded in by the assessee.

2. There is no evidence on record or document to verify the basis of the valuation of the closing stock shown by the assessee. The assessee is not able to prepare such details even with the help of books of accounts maintained, purchase bills & Sale Invoices.

3. Provisions of Section 145(3) are clearly attracted in this case.

4. The genuineness of purchases to the extent of Rs.42 lakhs (approx.) is not proved without any doubt.

5. The GP rate declared by the assessee at 13.49% during the assessment year is not a match to the result declared by the itself in the previous assessment ye