RAMESH CHANDRA CHATURVEDI Vs. COMMISSIONER OF INCOME TAX

JUDGEMENT

(1.) PATNA Bench 'B' of the Income-tax Appellate Tribunal has asked for the opinion of this court on the question :

(2.) WE have had some difficulty in understanding the question, particularly if it means that some part of the materials supplied to the assessee belonged to the Government department and always remained their property but used by the assessee in the execution of the contract. If this fact had been clearly indicated, it would have been easier to answer this question. The question, however, is restricted to the facts and circumstances of the case and, therefore, the facts and circumstances, as obtained in this case, are now being stated.

(3.) MR. Rameshwar Prasad No. 2, appearing for the assessee, submitted that the assessee could not have had any profit on the materials used by it in the execution of the contract, because those materials were all supplied by the other party, in this case, certain departments of the State Government. According to MR. Prasad, it was incumbent on the assessee to accept whatever materials were delivered to it for use in the execution of the contract and in such a view of the matter, the assessee was wholly unconcerned with the value of such materials supplied to it. On the value of such materials, according to MR. Prasad, no profit could have accrued to the assessee and, therefore, in determining the assessee's net profit the value of such materials must be excluded from his gross turnover.