Government-supplied materials excluded from gross turnover where binding Supreme Court authority controls the contract valuation issue.

The value of materials supplied by the Government for execution of contracts was held not to be included in gross turnover, because the issue was governed by the binding Supreme Court ruling in Brij Bhushan Lal Parduman Kumar v. CIT, which had displaced the earlier contrary view of the Punjab and Haryana High Court. On that basis, the answer on inclusion was given in favour of the assessee and against the Revenue. The further question on estimating additional profit on that footing was left unanswered as academic.

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Issues: Whether the value of materials supplied by the Government in execution of the contracts was liable to be included in the gross turnover and whether additional profit could be estimated on that basis.

Analysis: The issue stood covered by the decision of the apex court in Brij Bhushan Lal Parduman Kumar v. CIT, which had reversed the view earlier taken by the Punjab and Haryana High Court. In light of that binding authority, the inclusion of the value of Government-supplied materials in gross turnover was not justified. Once that question was answered, the other referred question did not require adjudication.

Conclusion: The question relating to inclusion of the value of materials supplied by the Government was answered in the negative, in favour of the assessee and against the Revenue. The remaining question was left unanswered as academic.

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