1987 (3) TMI 98

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....tion to the assessment year 1974-75. The assessee is a partnership firm. The question referred to us for our opinion is: " Whether, on the facts and in the circumstances of the case, tribunal was correct in holding that profit could be estimated with reference to the gross receipts which included certain materials supplied by the Heavy Engineering Corporation ? " During the year in question,....

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....oner assessed the profit at the rate of 5%. The assessee, being aggrieved by the order of the Appellate Assistant Commissioner, levying tax on the income from the value of the materials supplied, i.e./ Rs. 4,57,375, appealed to the Tribunal. The finding of the Tribunal reads as follows: " The Appellate Assistant Commissioner, however, had been too fair in separating the cost of materials from t....

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....of profit on the basis of materials supplied albeit only at 5% was illegal. It was submitted that there was no question of any profit involved in the supply of materials to the assessee by the Heavy Engineering Corporation. Learned counsel for the assessee had placed reliance upon the decision of the Supreme Court in Brij Bhushan Lal Parduman Kumar v. CIT [1978] 115 ITR 524, where their Lordships ....

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....the contract. Thus although the contract document may be showing that the materials always remains the property of the Department, yet, in actual practice, it may not be so and, therefore, the Department had got to consider whether, as a fact, the contractor bid control over the materials or the Department had the control. The matter has to be determined in that light. The decision of this cour....