Commissioner of Income Tax vs Rathi Construction Co.

Gupta, J.

The respondent-assessee filed his return for the assessment year 1988-89. It claimed that the total income was Rs. 28,130. Vide order dated 30-

3-1989, the assessing authority fixed the taxable income at Rs. 1,79,480. This was done on the assumption that the assessee must have made a

profit of 10 per cent. The assessee filed an appeal. Vide order dated 19-6-1990, the Commissioner (Appeals) accepted the assessee''s claim

partly. It held that the taxable income was Rs. 58,643. The order was affirmed by the Tribunal vide its order dated 21-1-1998. The department

filed an application u/s 256(1) of the Income Tax Act, 1961 (hereinafter referred to as ''the Act'') for a reference to this court. Vide order dated 3-

3-1999, a copy of which has been produced as Annexure P.3, the prayer for reference has been declined. Aggrieved by the order, the revenue

has filed this petition u/s 256(2). It prays that the Tribunal be directed to refer the following question for the opinion of this court :

Whether, on the facts and in the circumstances of the case, the Tribunal is justified in applying net profit rate of 10 percent after deducting the cost

of material supplied by the department from the gross receipts, especially when the PWD Department itself allows the benefit of 10 per cent net

profit rate on the cost of the project estimated by it ?

We have heard Mr. R.P. Sawhney, the learned counsel for the revenue.

The Tribunal has found that the assessee''s profit had been computed at Rs. 1,24,475 without giving any reason. The decision is based on the

peculiar facts of the case. We do not find that any question of law arises which may require consideration by this court. Resultantly, the petition is

dismissed.