O R D E R

PER M. BALAGANESH, A. M.:

1. The appeal in ITA No.4907/Del/2025 for AY 2022-23, arises out of the order of the ld National Faceless Appeal Centre (NFAC), Delhi [hereinafter referred to as ‘ld. CIT(A)’, in short] dated 09.07.2025 against the order of assessment passed u/s 143(3) r.w.s. 144B of the Income-tax Act, 1961 (hereinafter referred to as ‘the Act’) dated 12.03.2024 by the Assessing Officer, ITO, Rewari (hereinafter referred to as ‘ld. AO’).

2. The Ground Nos. 2 & 3 raised by the Assessee were stated to be not pressed by the Learned AR at the time of hearing. The same is reckoned as a statement made from the Bar and accordingly dismissed as not pressed.

3. The Ground Nos.1 & 7 raised by the Assessee are general in nature and does not require any specific adjudication.

4. The Ground Nos. 4 to 6 raised by the Assessee are in respect of common issue of disallowance of purchases made from three parties in the total sum of Rs 1,20,65,111.

5. We have heard the rival submissions and perused the materials available on record. The Assessee is in the business of purchase, manufacturing and sale of all kinds of natural stones. The return of income for the assessment year 2022-23 was filed by the Assessee on 29-10-2022 declaring total income of Rs 3,07,58,400. The case of the Assessee was selected for scrutiny vide issuance of notice under section 143(2) of the Act on 2-6-2023. Thereafter, notice under section 142(1) of the Act dated 13-7- 23 and 11-1-24 were issued requesting the Assessee to provide computation of income, Form 26AS, profit and loss account, balance sheet, bank statements with explanation for all major credits/ deposits, GST returns along with reconciliation of receipts/ income reported therein with the ITR. The Assessee was also directed to give party wise breakup of tax deducted at source by him on all expenses debited to profit and loss account and proof of payment of all the expenses, mode of payment, copy of sale deed and purchase deed, calculation of capital gains on sale of property and E-Way bills with details of goods transported, toll receipts containing the details from the place of origin to the place of destination, lorry number and any other mode of transportation details, stock register and ledger of concerned party in his books. Effectively the complete details of purchases made by the Assessee were sought to be examined as that was the main reason for the selection of case of the Assessee for scrutiny under CASS. During the course of assessment proceedings, all the collaborative documents which were required by the Learned AO were submitted vide online submissions dated 28-7-23, 11-8-23, 24-8-23 and 17-1-24. The Learned AR submitted that Assessee had furnished all the relevant documents in support of the purchases made by him. The e-Way bills containing the details of goods transported, toll receipts, details from the place of origin to place of destination, lorry number, mode of transportation, stock register and ledger account of all the suppliers in the books of the Assessee were duly furnished before the Learned AO. The Learned AO resorted to make some online inquiries from GST and similar portals and some third-party postal verification and the materials thus gathered were found not reconciling with the evidence / clarifications supplied by the Assessee. Accordingly, the Learned AO proceeded to issue showcause notice to the Assessee as to why adverse inferences may not be drawn on the Assessee in respect of purchases made from three suppliers as under:-

a) Babu Singh - Rs 1,92,000

b) Sunil Kumar - Rs 11,03,361

c) Lalitha Devi - Rs 1,07,69,850

TOTAL Rs 1,20,65,111

6. In response to the show-cause notice issued by the Learned AO, the Assessee furnished the copy of purchase bills, copy of bank statements evidencing the payments made to the aforesaid three suppliers through regular banking channels, together with confirmation of ledger account from the party confirming the value of p