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TMI Blog1984 (11) TMI 7X X X X Extracts X X X X X X X X Extracts X X X X ..... e following question of law for our opinion under section 256(2) of the Income-tax Act, 1961, pursuant to the direction of this court : "Whether, on the facts and in the circumstances of the case, the cost of materials supplied by the Department was liable to be included in the total receipts of the assessee for calculation of its profit for the assessment year 1968-69 ?" The relevant facts are ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nt Commissioner observed that no profit was involved on the materials supplied by the companies concerned to the assessee and, as such, the rate of net profit at 10% should be applied on the net receipts of Rs. 3,71,346. He, therefore, estimated the net profit at Rs. 37,134 and also allowed depreciation on it. A copy of the first appellate order has been marked annexure-B to the statement of the c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rder. The Tribunal has given findings of facts based on materials on record which have not been shown to be either perverse or based on no material on record or as not having been well instructed on matters of fact and law as was done by the Supreme Court in the case of CIT v. S. P. Jain [1973] 87 ITR 370. The finding of the Tribunal on facts being based on materials on record, there seems to be n ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... regard to the custody of the materials in question. We, accordingly, are constrained to follow a Bench decision of this court in Kalpnath Rai's case [1985] 151 ITR 281. In the result, therefore, the question referred to us is answered in favour of the assessee and in the negative. We hold that, on the facts and in the circumstances of the case, the cost of materials supplied by the two contracti ..... X X X X Extracts X X X X X X X X Extracts X X X X
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