1981 (3) TMI 120

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

.... a rate of about 7 per cent. This rate was considered to be low by the ITO and, he, therefore, required the assessee to give reasons for the low G.P. The assessee's explanation was that the contract for construction of roads had been taken in an earlier period on the basis of rates prevailing at that time. The rates of certain items particularly gitty had increased after July, 1975. The ITO, however, did not accept the assessee's submission fully. After taking note of the fact that in the immediately preceding year the rate applied was 13 per cent and after giving some consideration for the rise in the cost of materials he applied the net profit rate of 10 per cent and determined the income from this source at Rs. 64,380. The assessee had f....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....f about Rs. 66,000. The AAC, therefore, did not accept the assessee's explanation. He confirmed the rate of net profit applied at 10 per cent. He, however, gave a direction that the cost of material amounting to Rs. 66,666 supplied by the concerned Department should be excluded from the receipts in view of the Supreme Court judgment in Brij Bhushan Lal Praduman Kumar, etc. vs. CIT (1978) 115 ITR 524 (SC). Both the parties are aggrieved by this order of the AAC. 4. The ld. Deptl. Rep. Submitted that the judgment of the Supreme Court in Brij Bhushan Lal Parduman Kumar, etc. vs. CIT (1978) 115 ITR 524 (SC) should not be followed as there was no agreement in this case for the supply of material by the concerned Department. He referred to the j....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....see's book result in respect of the contract of construction or roads. 5. We have carefully considered the rival submission. In the face of the judgment of the Supreme Court in the case of Brij Bhushan Lal Parduman Kumar, etc. vs. CIT (1978) 115 ITR 524 (SC) we cannot accept the argument of the Patna High Court in Ramesh Chandra Chaturvedi vs. CIT, Bihar (1980) 121 ITR 116 (Pat) should be followed. Even though the judgment of the Supreme Court is dt.6th Oct., 1978. This judgment was not brought to the notice of Their Lordships of Patna High Court when they delivered their judgment on10th Sep., 1979in the case of Ramesh Chandra Chaturvedi. The Patna High Court has itself held that no hard and fast rule can be laid down as to whether the val....