Piyare Lal Hari Singh vs Commissioner of Income Tax

Arijit Pasayat, C.J.—At the instance of the assessed, in compliance with the directions given by this court by order dated July 20, 1978, in I. T. C. No. 40 of 1974 u/s 256(2) of the Income Tax Act, 1961 (in short "the Act"), the following questions have been referred for the opinion of this court by the Income Tax Appellate Tribunal, Delhi Bench-B (in short "the Tribunal") :

"1. Whether, on the facts and in the circumstances of the case and provisions of law, the Tribunal was justified in coming to a conclusion that the provisions of Section 145(2) of the Income Tax Act, 1961, are applicable to this case ?

Whether the Tribunal was further justified in including the value of the material supplied by the Government in the execution of the contracts in gross turnover of the applicant-firm and further estimating an additional profit at Rs. 80,920 on account of materials supplied by the Government to the applicant-firm in the execution of the contracts ?"

The dispute relates to the assessment year 1967-68 for which the previous year ended on December 31, 1966. The issue was whether value of the materials supplied by the contracted would be taken note of while determining the profits from the contractor''s receipts. The Tribunal placed reliance on a decision of the Punjab and Haryana High Court in BRIJ BUSHAN LAL Vs. COMMISSIONER OF Income Tax, PUNJAB., to answer in favor of the Revenue. A prayer for reference in terms of Section 256(1) of the Act was rejected and thereafter on being moved u/s 256(2) of the Act a direction was given to refer the questions as stated above for opinion of this court.

In spite of notice there is no appearance on behalf of the assessed. We have heard learned counsel for the Revenue. The issue is settled by a decision of the apex court in Brij Bhushan Lal Parduman Kumar Vs. Commissioner of Income Tax , Haryana Himachal Pradesh and New Delhi III, . The judgment of the Punjab and Haryana High Court in BRIJ BUSHAN LAL Vs. COMMISSIONER OF Income Tax, PUNJAB., , was upset by the apex court. That being the position, our answer to the second question is in the negative, i.e., in favor of the assessed and against the Revenue. In view of the said answer, the first question really becomes of academic interest. We deem it unnecessary to answer the same.

The reference is disposed of accordingly.