9911796707
TMI Blog2012 (5) TMI 369X X X X Extracts X X X X X X X X Extracts X X X X ..... of law raised by the assessee on which this Tax Case Appeal was admitted by this Court: 1. Whether the Tribunal was right in law in holding that the sum of Rs.55,72,981/- is to be treated as income even though the assessee has disclosed the value of goods as part of closing stock? 2. Whether the Tribunal is right in law in ignoring that the role of the assessee with regard to the goods supplied by supplier is only that of a bailee and so the value of goods cannot constitute income in its hands? 2. Learned counsel appearing for the assessee submits that he is not pressing the second substantial question of law. An endorsement to that effect has also been made by the learned counsel appearing for the assessee. Hence, the question that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... be entitled to receive 75% of the value of the cement, as far as steel brought to site for incorporation into the works was concerned, the assessee would be entitled to 100% payment. The clause further reads that the advance thus paid would be recovered from the monthly progress payments pro-rata according to the quantities of work billed for, to the extent of 75% of the cost of cement and 100% of the cost of steel. Clause 5.08 states that the progress payment made shall be regarded as payment by way of advance against final payment only and not as payment for the work completed till the date of progress payment. Clause 24.01 of the contract further provides that the contractor assessee herein had to arrange for all the materials required ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ould be treated as the income of the assessee. 6. Aggrieved by this, the assessee went on appeal before the Commissioner of Income Tax (Appeals). Referring to Clause 5.03, the Commissioner of Income Tax (Appeals) held that the assessee had to pay for the cement and steel supplied by NSTL. In the circumstances, there could be no separate addition. Thus, the addition of a sum of Rs.55,72,981/- was cancelled. 7. The Revenue filed an appeal before the Tribunal as against this portion of the order, which, however, accepted the Revenue's contention and allowed the appeal. The Tribunal pointed out that when the assessee had undertaken only labour contract, the assessee should not have debited the cost of material to its account. Thus, without ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... year. As rightly pointed out by the Commissioner of Income Tax (Appeals), the clauses in the agreement clearly show that the assessee had to pay for the cement and steel used in the contract. The rest of the advance amount from NSTL cannot be, however, construed that NSTL paid for steel and cement. Going by the terms of the contract, particularly Clause 2.06 and Article 5, we have no hesitation in accepting the plea of the assessee that the Tribunal misconstrued the clauses in the agreement to hold that the value of the closing stock had to be treated as income of the assessee. In the circumstances, we have no hesitation in setting aside the order of the Tribunal. Accordingly, the order of the Tribunal stands set aside and the Tax Case A ..... X X X X Extracts X X X X X X X X Extracts X X X X
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