9911796707
TMI Blog1977 (9) TMI 62X X X X Extracts X X X X X X X X Extracts X X X X ..... . 5,29,270.74 and after deduction of Income-tax of Rs. 33,098 the net payment was Rs. 10,28,902. The ITO took the view that as the Income-tax is deducted @ 2 per cent on the payment the gross receipt should have been Rs. 16,54,900 and not Rs. 15,91,270.74 shown in the certificate of the Garrison Engineer. The assessee also filed certificates of deduction of tax and from this figure the ITO found that the total payment was Rs. 16,54,900. The ITO has pointed out that the figure of payment of Rs. 2,91,000 was wrongly noted as Rs. 1,92,000 and the figure of payment of Rs. 4,01,000 which was wrongly noted at Rs. 2,41,980. The ITO, therefore, held that the gross receipt of the assessee was Rs. 16,54,900. The ITO for the detailed reasons mentioned ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the extent of Rs. 5,29,270.74. the learned departmental representative has submitted that the net profit rate should be adopted on the gross receipts and the value of the materials cannot be excluded while adopting the net profit rate. He has also submitted that if the net profit rate is to be adopted on the net receipts after excluding the value of the materials then the matter should be sent back to the AAC for re-deciding the rate of profit, which should be adopted on the net receipt as in that case higher net profit rate has to be adopted. We cannot accept this contention of the learned departmental representative. The estimate of net profit at 10 per cent has been adopted in the contract receipt. Simply because the cost of materials w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in this schedule will be issued to the contractor solely for the purpose of incorporation in the work. 7. The learned counsel for the assessee has submitted that the materials are supplied by the military authority to the assessee and the un-used materials have to be returned to the military authority and thus the assessee has no control over the materials supplied by the military authority. It is evident that the materials supplied by the Department are utilised by the assessee in the work and thus the assessee has no profit from the materials supplied by the department. The learned counsel for the assessee has submitted that at the time of tender it is clearly mentioned that the materials will be supplied by the Department and the tend ..... X X X X Extracts X X X X X X X X Extracts X X X X
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