COMMISSIONER OF INCOME TAX Vs. JAISWAL VERMA CONSTRUCTION COMPANY

JUDGEMENT

(1.) A statement of the case under Section 256(1) of the Income-tax Act, 1961 (hereinafter referred to as "the Act"), has been submitted by the Income-tax Appellate Tribunal, "A" Bench, Patna, referring the following question of law for the opinion of this court:

(2.) THE reference application has been filed by the Commissioner of Income-tax, Bihar, Patna, and Mr. B.P. Rajgarhia, learned counsel for the Revenue, has not disputed the other findings of the Tribunal and wants the answer only to the question relating to the contract with the Housing Department of the Government of Bihar. He has also submitted that the question relating to the profit from contract with Bokaro Steel Ltd. is not in dispute, as from the order of the Tribunal, it is evident that there has been no deduction relating to the cost of materials for Bokaro Steel Ltd. As regards the contract for Patratu THErmal Power Plant, he has accepted the finding of the Tribunal, in view of the decision of this court in the case of Kalpnath Rai v. CIT [1985] 151 ITR 281. Hence, the order of the Tribunal was justified. So it has to be held that as regards the contract for Patratu THErmal Power Plant, the Tribunal was justified in holding that the value of the materials supplied to the assessee in respect of the contract should be excluded from the gross profit in determining the net profit by application of rate in view of the terms of the contract and so the question will accordingly be answered in favour of the assessee and against the Department.

(3.) HOWEVER, I refuse to answer the question relating to the contract of the assessee with the Housing Department of the Government of Bihar. The Appellate Tribunal will record a finding whether the Housing Department of the Government of Bihar had control over the materials supplied to the assessee and that the assessee had no control over materials supplied by the Housing Department of the Government of Bihar. In deciding this matter, the Appellate Tribunal will keep in view the law laid down by the Supreme Court in the case of Brij Bhushan Lal Parduman Kumar v. CIT [1978] 115 ITR 524 and of this court in Ramesh Chandra Chaturvedi v. CIT [1980] 121 ITR 116. There will be no order as to costs.