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TMI Blog1984 (5) TMI 138X X X X Extracts X X X X X X X X Extracts X X X X ..... peal of the department and the cross-objection filed by the assessee were fixed for hearing, thrice and twice adjournments were granted at the request of the assessee. The appeal was first fixed for hearing on 4-4-1983. The departmental representative requested for adjournment and the hearing was adjourned. Again it was fixed for hearing on 23-4-1984. Even then request for adjournment was made on behalf of the assessee and the hearing was adjourned to 10-5-1984. Again request for adjournment has been made which has been rejected as there was no sufficient ground mentioned for making request for adjournment and the assessee has already been granted adjournment twice. The only cause mentioned in the petition for adjournment dated 9-5-1984 is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... income and the income finally assessed). The Commissioner (Appeals) while dealing with the penalty matter held that no profit had arisen on the turnover represented by the cost of materials supplied according to the decision of the Supreme Court in Brij Bhushan Lal Parduman Kumar v. CIT [1978] 115 ITR 524. As the ITO while levying the penalty had taken into account the total income finally confirmed which included the profit even on the materials supplied, the Commissioner (Appeals) while dealing with the appeal against the order under section 271(1)(c) reduced the penalty levied by the ITO of Rs. 48,680 by Rs. 25,089 confirming the penalty to the extent of Rs. 23,591 only. 4. As mentioned above, both the assessee and the department are in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... be held that the assessee was unaware of the actual receipts. It is clear from the fact mentioned in the order of the ITO/Commissioner (Appeals) that the assessee suppressed the receipts purposely to evade the payment of proper taxes. The assessee not only suppressed the receipts in the account books produced before the income-tax authorities but also managed to obtain wrong certificates from A.I.R. It was a clear case of concealment and in this respect we agree with the order of the Commissioner (Appeals) fully. The appeal of the assessee and the cross-objection raised to the effect that whole of the penalty should have been cancelled are rejected. 6. Now coming to the appeal of the department, the following grounds have been raised in t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... declared receipts at Rs. 5,85,461 which were far lesser than the actual receipts. This ground being incorrect is rejected. 7. The next ground taken in the departmental appeal is that the Commissioner (Appeals) erred in concluding that the decision of the Supreme Court in Brij Bhushan Lal Parduman Kumar's case is applicable in the facts of the case. The departmental representative has argued that in the said case before the Supreme Court it was found as a fact that the materials remained the property of the Government in substance and in reality and these remained in the custody of the Government. These were only issued from time to time for being used in the works and the assessee had no opportunity to use the materials otherwise. Thus, t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ase, the value of the materials cannot be included in the gross receipts from the contract, because the assessee had no control whatsoever over the materials. It was just given to it by the other party to be used in the contract and the assessee never got concerned about its value. Therefore, no hard and fast rule can be laid down as to whether the value of the materials should or should not be included in a contractor's turnover from business, for determining his net profits. In the instant case the assessee-firm did not maintain a stock register for the materials received from the Government department or for materials purchased by the assessee itself. The assessee also did not maintain an issue register. Since there were no other circum ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... held that the ratio of the decision of their Lordships of the Supreme Court in Brij Bhushan Lal Parduman Kumar's case would apply. We hold that the Commissioner (Appeals) was not correct and was not justified in excluding the value of materials supplied while computing the profit of the assessee and that also while dealing with the appeal of the assessee against the order under section 271(1)(c) of the ITO levying penalty for concealment. Once the quantum of appeal has been decided and the net income worked out therein while dealing with the appeal against the penalty order, the Commissioner (Appeals) cannot come to a different total income contrary to the conclusion given in the quantum appeal. Further, such a conclusion was neither correc ..... X X X X Extracts X X X X X X X X Extracts X X X X
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