1966 (7) TMI 17

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..... erred the following question : "Whether, on the facts and in the circumstances of the case, the inclusion of any sum as profits on materials supplied by the Government under its agreement with the assessee is right in law ? " The assessee entered into two contracts for the execution of certain works for the State Government. The total amount of the first of these contracts is Rs. 5,52,191 and t .....

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..... lso contended before all the authorities that the amount of Rs. 2,56,689 and Rs. 87,482 should also be left out of account, because they represent the cost of the materials supplied by the Government. This contention of the assessee has been rejected and the question is whether on the facts and in the circumstances the computation of profits on the above amounts also will be justified in law. We .....

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..... almost the same. We do not see any justification for the bifurcation of the receipts. The contract is one whole and the estimate is to be made on that basis. If the assessee purchased materials for fulfilling its contract with the P.W.D. it might have made an additional profit on the purchases and transfer of such materials to the contract. It may be that when this is not the case, the rate of pro .....

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..... gross receipts after excluding the hire charges amounting to Rs. 54,575. The rates adopted are reasonable and no interference is called for. " It is clear that the Tribunal has proceeded on the basis that there is an element of profit involved even in the supply of materials by the State Government. Even so they were prepared to say that there was no such element involved in the hire charges. We .....

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..... e in which a conclusion has been reached without any material and against whatever material was available. The conclusion is unsustainable, supported as it is by no material. In the light of the above, we answer the question referred to us in the negative, i.e., in favour of the assessee and against the department. We make no order as to costs. Question answered in the negative.
Case laws, D .....

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