9911796707
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Issues:
1. Application of net profit rate on gross bill amounts. 2. Deduction of cost of materials supplied by the Government. 3. Justification of Tribunal's decision on excluding the value of materials supplied. Analysis: 1. The judgment concerns a reference under section 256(1) of the Income-tax Act, 1961, for the assessment years 1964-65 and 1965-66. The assessee, an individual, received gross bill amounts but did not maintain books of account. The Income-tax Officer applied a net profit rate on the gross bill amounts to compute total income. The Appellate Assistant Commissioner found that the Government supplied materials and upheld the inclusion of the cost of materials in determining net profit. The Tribunal also supported this view, leading to the question of whether the net profit rate was correctly applied without deducting the cost of materials supplied by the Government. 2. The assessee contended that no element of profit should be attributed to the cost of materials supplied by the Government. However, the Tribunal concluded that the assessee tendered for the contract inclusive of material costs, indicating an element of profit in the materials supplied. The court noted that the assessee had knowledge of the materials supplied by the Government and that the Tribunal's decision was based on the available evidence. The court distinguished previous cases cited by the assessee, emphasizing the specific facts and legal principles involved in those cases. 3. The court affirmed the Tribunal's decision, stating that the Tribunal's conclusion was not based on surmise or lack of evidence. The court highlighted that the question referred did not challenge the Tribunal's findings on this basis. Additionally, the court referenced decisions from other High Courts to support its conclusion. Ultimately, the court answered the question in the affirmative, in favor of the revenue, and directed each party to bear its own costs. Judge R. N. Pyne agreed with the decision.
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