MAYANK DIAMONDS PVT. LTD. Vs. I.T. OFFICER

JUDGEMENT

(1.) BEING aggrieved and dissatisfied with the impugned judgement and order dated 18.10.2002 passed by the Income Tax Appellate Tribunal, 'B' Bench (Tribunal) in Income Tax Appeal No. 341/Ahd/2002 for the assessment year 1997 -98, the revenue has preferred the present tax appeal with the following substantial question of law:

(2.) THE assessee company is engaged in trading of polished diamond. The assessee company showed turnover of Rs. 1,86,36,447/ - and gross profit of Rs. 1,93,105/ - which comes to 1.03%. During the assessment proceedings, the details of purchase was called for and the list of purchase parties was submitted by the company. During the assessment proceedings the director of the company explained that there is no bill issued by purchase parties. The Director of the assessee company was summoned under section 131 and statement was recorded. The Assessment Officer came to the inference that purchases amounting to Rs. 1,68,48,663/ - are bogus and he added this amount in the computation of the assessee company's income.

(3.) MR . Mehta, learned advocate appearing for the respondent supported the impugned order and submitted that the Tribunal has rightly observed that addition at the rate of 12.5% is applicable in the present case because the appellant company has siphoned off large amount by showing bogus and fictitious addresses. He submitted that the present appeal lacks merits and therefore deserves to be dismissed.