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7. We have heard rival submissions and perused the material on record. First, we will adjudicate whether the AO has rightly rejected the books of accounts. During the course of assessment proceedings, assessee was asked to explain decreasing in GP when there was an increase in turnover. It was also observed by the AO that there was abnormal increase in expenditure. During the course of assessment proceedings, summons u/s.131 of the Act was issued to ten parties. However, only seven creditors filed their reply. Out of seven replies received by the AO, discrepancy was noticed in replies of three creditors as there was difference in amounts confirmed. One of the parties, Sri Lakshmi Tyres stated that there was no transaction with the assessee during the relevant period. The assessee had also failed to submit the entire list of sundry creditors. Further, the AO also noticed that there was huge outstanding shown in the name of daily wage earners and the expenses were not correlated with the receipts. Further, it was noted by the AO that the labour expenses were inflated via self- made vouchers and not paid weekly as claimed. There was non- compliance with the chapter XVIIB since there was TDS defaults on :- 5 -: ITA No.2916/Chny/2025 contract bills. Though in the audit report there was no adverse noting by Auditor but during the course of assessment proceedings clearly multiple defects were identified by the AO which was not controverted during the course of assessment proceedings, the appellate proceedings nor before us. Therefore, on facts of the instant case we uphold the rejection of books of accounts u/s.145(3) of the Act.