1981 (10) TMI 49

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.... as against 10.75 per cent of the previous year when the net profit shown was Rs. 31,435 on payment receipts of Rs. 2,97,306.24. The assessee explained before the ITO that on account of the increase in work, supervisory and other expenses had increased. The assessee also stated that from the value of the contract it was entitled to the exclusion of an amount of Rs. 67,829.85 being the cost of the materials supplied by the U.P.S.E.B. (Cement, Steel, Slyash, water charges etc. of which the details were given in the assessee's reply dt. 30th January, 1980). In this connection reliance was placed by the assessee on the decision of the Supreme Court in Brij Bhushan Lal Parduman Kumar vs. CIT 1978 CTR (SC) 134 : (1978) 115 ITR 524 (SC). The ITO d....

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....sessee for the perusal of the ld. AAC. Having heard the ld. Deptl. Rep. this additional evidence was admitted by us on the record and looking to the fact that the production of the agreement before the ld. AAC for his perusal, was not disputed before us its reception remains a mere formality as it is not a new evidence and no useful purpose is likely to be served by remitting the matter to the ITO or to the ld. AAC in that regard. We have heard the rival submissions of both the parties on this agreement as well. Shri M.M. Sadh the ld. counsel for the assessee reiterating the submission made before the authorities below, argued that the ld. AAC was not right in taking the view that having regard to the terms of the agreement, the cost of mat....

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....not be included in the gross receipts from the contract because the assessee had no control whatsoever over the materials. They were just given to it by U.P.S.E.B. to be used in the contract and the assessee never got concerned about their value. Clause 3 of the Special Conditions of the contract stipulates that the assessee shall "be granted time limit extension the extent of such period as his work remains stopped for want of materials to be issued by the Board. Further cl. 4 mentions that the materials to be issued by the U.P.S.E.B. shall be issued at its store at Obra Colony or at Thermal Power Station Obra (Mirzapur). It further stipulates that if any material is consumed in excess of the standard Schedule of Consumption, the cost of t....