S.S Sandhawalia, C.J:— A head-on conflict of judicial precedent had rightly necessitated this reference to the Full Bench. Fortunately, however, it now stands resolved by a recent judgment of the final court.
2. The question of law that has been referred for the decision is as follows;
“Whether, on the facts and in the circumstances of the case, the Tribunal was justified in law in confirming the order of the Appellate Assistant Commissioner that price of stores supplied by Government was not to be included while applying the flat rate to the assessee's contract receipts?”
3. The Division Bench before whom the matter was first placed noticed the divergent views taken by the various High Courts and particularly because of the challenge laid to the correctness of the judgment in Brij Bushan Lal v. CIT, [1971] 81 ITR 497 (Punj) has referred the matter for decision to the Full Bench.
4. In the aforesaid case, it had been held that the Tribunal was justified in holding that the price of stores supplied by the military authorities to a contractor of the M.E.S department was to be included before applying the flat rate to the assessee's receipts. On an appeal being carried against the said judgment, their Lordships in Brij Bhushan Lal Parduman Kumar v. CIT, [1978] 115 ITR 524 (SC) have reversed the said judgment and held that the assessment was to be made excluding the cost of material and stores received for being used in the works undertaken by the contractor.
5. Learned counsel for the parties are agreed that no controversy now exists and the decision of their Lordships of the Supreme Court in Brij Bhushan Lal Parduman Kumar's case, [1978] 115 ITR 524, completely governs the present case as well. Following the decision we return the answer to the question referred in, the affirmative, that is, in favour of the assessee and against the revenue.
6. There will be no order as to costs.
B.S Dhillon, J.:— I agree.
Harbans Lal, J.:— I agree.