Dipak Kumar Sen, J. - (1.) The following questions have been directed to be referred under Section 256(2) of the Income-tax Act, 1961 : " 1. Whether, on the facts and in the circumstances of the case, it is perverse to hold that, in estimating the net profit of structural contracts entered into with the Goverment department, the percentage is to be calculated on the gross receipts inclusive of the value of materials supplied by the department themselves.
(2.) Whether, on the facts and circumstances of the case, while holding that in estimating the net profit of the structural contracts the percentage is to be calculated on the gross receipts, it should have been decided also whether the percentage adopted by the authorities concerned need any modification ?" 2. The reference is at the instance of the assessee, N.K. Sengupta, Calcutta. The assessment years involved are 1957-58, 1958-59, 1959-60 and 1962-63. The facts found or admitted as appearing in the statement and the annexures thereto may be shortly noted as hereunder : The assessee is a contractor and in the relevant assessment years undertook jobs under various Government departments like the Construction Board of the Government of West Bengal.
(3.) The books of accounts were maintained by the assessee. They were not accepted by the Income-tax Officer at the time of assessment and the assessee's income was determined on estimate. For the assessment years 1957-58 to 1959-60, estimated amounts were added to the net receipts of the assessee. For 1959-60, this figure was 10% on account of the materials supplied by the Government departments. For the assessment years 1957-58 and 1958-59, lump sum additions were made on this account.;