Law:

Section:

Section 145 of the Income-tax Act, 1961 - Method of accounting - Estimation of profits - Whether profit of assessee-contractor should be estimated with reference to net payment only after excluding from gross payment cost of materials supplied to assessee by Government in accordance with terms of contract - Held, yes FACTS The Tribunal held that the profit of the assessee should be estimated with reference to the net payment only after excluding from the gross payment the cost of materials supplied to the assessee by the Government in accordance with the terms of the contract. On reference: HELD In view of the Supreme Court's decision in Brij Bhushan Lal Parduman Kumar v. CIT[1978] 115 ITR 524 , the Tribunal was right in holding that the profit of the assessee should be estimated with reference to the net payment only after excluding from the gross payment the cost of materials supplied to the assessee by the Government in accordance with the terms of the contract. Note : The decision was in favour of assessee. CASE REVIEW Briji Bhushan Lal Parduman Kumar v. CIT [1978] 115…

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