| Case ID |
f9c52356-5982-4fac-819a-0d14146d93ec |
| Body |
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| Case Number |
Taxation Case No.171 of 1978 |
| Decision Date |
Jul 24, 1987 |
| Hearing Date |
|
| Decision |
The court held that the cost of materials supplied by the Government should not be included in the total receipts of the assessee for calculating its profits for the assessment year 1974-75. The court referenced earlier decisions, emphasizing that the materials supplied remained the property of the Government and did not contribute to the contractor's profit. The ruling was consistent with previous judgments regarding similar issues. The reference was answered in favor of the assessee. |
| Summary |
This case revolves around the taxation implications for a contractor, S.P. VIZ CONSTRUCTION CO, regarding the inclusion of Government-supplied materials in their profit calculations. The Patna High Court, through the judgment delivered by Justices UDAY SINGHA and B.N. AGRAWAL, concluded that the cost of materials provided by the Government should not be considered part of the contractor's total receipts. The ruling affirmed that the contractor had no ownership or profit from the materials supplied, as they remained the property of the Government throughout the project. This decision aligns with established precedents in tax law, specifically referencing earlier cases such as C.I.T. v. S.P. Jain and Kalpnath Rai v. C.I.T. This case is significant for contractors working with government contracts, as it clarifies the tax obligations and the treatment of materials supplied by the Government. The ruling not only impacts future assessments but also provides a framework for understanding profit calculations in similar contractual arrangements. Keywords related to taxation, contractor obligations, and government contracts are crucial for legal professionals navigating these complex issues. |
| Court |
Patna High Court
|
| Entities Involved |
|
| Judges |
UDAY SINGHA,
B.N. AGRAWAL
|
| Lawyers |
B.P. Rajgarhia,
S.K. Sharan
|
| Petitioners |
COMMISSIONER OF Income Tax
|
| Respondents |
S.P. VIZ CONSTRUCTION CO
|
| Citations |
1989 SLD 52,
1989 PTD 345,
(1988) 57 TAX 66
|
| Other Citations |
C I T v. S P Jain (1973) 87; I T R 370 (S C),
Kalpnath Rai v. C.I.T. (1985) 151 I T R 281 (Pat.)
|
| Laws Involved |
Income Tax Act, 1961
|
| Sections |
Not available
|