Delhi H.C : Whether, on the facts and in the circumstances of case and provisions of law, the Tribunal was justified in coming to a conclusion that the provisions of s. 145(2) of the IT Act, 1961, are applicable in this case?

High Court Of Delhi

Piyare Lal Hari Singh vs. CIT

Section 145

Asst. Year 1967-68

Arijit Pasayat, C.J. & D.K. Jain, J.

IT Ref. No. 158 of 1980

21st November, 2000

Counsel Appeared

Ms. Prem Lata Bansal & Ajay Jha, for the Respondent : None of the Assessee

JUDGMENT

ARIJIT PASAYAT, C.J. :

At the instance of assessee, in compliance with the directions given by this Court by order dt. 20th July, 1978, in ITC No. 40 of 1974 under s. 256(2) of the IT Act, 1961 (‘the Act’) the following questions have been referred for opinion of this Court by the Tribunal, Delhi Bench B :

“1. Whether, on the facts and in the circumstances of case and provisions of law, the Tribunal was justified in coming to a conclusion that the provisions of s. 145(2) of the IT Act, 1961, are applicable in this case?

2. Whether the Tribunal was further justified in including the value of the material supplied by the Government in execution of the contracts in gross turnover of the applicant-firm and further estimating an addition profit at Rs. 80,920 on account of materials supplied by the Government to the applicant-firm in execution of the contracts?”

Dispute relates to the asst. yr. 1967-68 or which previous year ended on 31st Dec., 1966. The issue was whether the value of the materials supplied by the contractee would betaken note of while determining profits from the contractor’s receipts. The Tribunal placed reliance on a decision of the Punjab & Haryana High Court in Brij Bhushan Lal vs. CIT (1971) 81 ITR 497 (P&H) to answer in favour of the revenue. Prayer for reference in terms of s. 256(1) of the Act was rejected and thereafter on being moved under s. 256(2), direction was given to refer the questions as stated above for opinion of this Court.

In spite of notice there is no appearance on behalf of the assessee. We have heard the learned counsel for revenue. The issue is settled by a decision of the apex Court in Brij Bhushan Lal Parduman Kumar vs. CIT 1978 CTR (SC) 141 : (1978) 115 ITR 524 (SC) : TC 1R.318. Judgment of Punjab & Haryana High Court in Brij Bhushan Lal’s case (supra) was upset by the apex Court. That being the position, our answer to the second question is in the negative, i.e., in favour of the assessee and against the revenue. In view of the said answer, first question really becomes of academic interest. We deem it unnecessary to answer the same.

The reference is disposed of accordingly.

[Citation : 252 ITR 739]

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