TMI Blog1966 (7) TMI 17X X X X Extracts X X X X X X X X Extracts X X X X ..... GOVINDAN NAIR J.- The Income-tax Appellate Tribunal, Madras Bench, acting under section 66(1) of the Indian Income-tax Act, 1922, has referred 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hat the amounts of Rs. 53,912 and Rs. 663 for the two years representing the hire charges should not be taken into account. The assessee had also 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... unal said is seen from paragraph 11 of its order, which is annexure " F " and which reads as follows : " The position in the assessee's case is 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 ma ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pplied on the gross receipts. The hire charges would appear to stand in a different category. We direct the officer to work out the profit on the 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ne and that it was not calculated on the cost of departmental materials supplied for the work. In the light of the above, we feel that this is a case 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 neg ..... X X X X Extracts X X X X X X X X Extracts X X X X
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