1984 (1) TMI 26

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.... AGRAWAL J.-In this reference made under s. 256(1) of the I.T. Act, 1961, the Income-tax Appellate Tribunal, Jaipur Bench (hereinafter referred to as " the Tribunal "), has referred the following question to this court : Whether, on the facts and in the circumstances of the case, the Tribunal was right in holding that the cost of material supplied by the Government is not includible in the g....

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....e assessee firm. According to the books of account of the assessee-firm, the profit shown by the assessee-firm was 3.7% on the gross bill amount of Rs. 2,25,323. The ITO rejected the books of account of the assessee-firm under the provisions of s. 145 of the Act and estimated the net profit of the assessee-firm at 12 1/2% after estimating the gross contract receipts at Rs. 2,26,000. The AAC red....

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....for making a reference to this court and the Tribunal has referred the question referred to above to this court. We have heard Shri Suroliya, the learned counsel for the Revenue. The assessee firm his not chosen to appear. As noticed earlier, the Tribunal has held that the value of the material which was supplied by the Government for utilisation in the construction work amounting to Rs. 36,....

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....rporated in the works on the terms that they would remain the property of the Government and the surplus should be returned to the Government, the real total value of the entire contract would be the value minus the cost of such materials so supplied and that, since no element of profit was involved in the turnover represented by the cost of the materials supplied by the Government to the assessee....