Allahabad H.C : Whether, on the facts and in the circumstances of the case, the Tribunal was right in holding that the profit of the assessee should be estimated with reference to the net payment only after excluding from the gross payment the cost of materials supplied to the assessee by the Government in accordance with the terms of the contract ?

High Court Of Allahabad

CIT vs. Haridas Kapoor & Co.

Sections 28, 145

K.C. Agrawal, Actg. C.J. & R.K. Gulati, J.

IT Ref. No. 828 of 1978

20th July, 1989

BY THE COURT :

The following question has been referred by the Tribunal, B-Bench, Allahabad, under s. 256(1) of the IT Act for the opinion of this Court :

“Whether, on the facts and in the circumstances of the case, the Tribunal was right in holding that the profit of the assessee should be estimated with reference to the net payment only after excluding from the gross payment the cost of materials supplied to the assessee by the Government in accordance with the terms of the contract ?”

2. The controversy arising in this question has already been decided by the Supreme Court in Brij Bhusan Lal Parduman Kumar vs. CIT 1978 CTR (SC) 134 : (1978) 115 ITR 524 (SC). We, accordingly, answer the question in the affirmative, in favour of the assessee and against the Department.

[Citation :180 ITR 329]