BRIJ BHUSHAN LAL PARDUMAN KUMAR ETC. vs COMMISSIONER OF INCOME TAX, HARYANA, HIMACHAL PRADESH ANDNE

The Supreme Court held that in the context of 'best judgment assessment' for income tax, the contractor's income from lumpsum contracts with the Military Engineering Services (M.E.S.) should exclude the cost of materials supplied by the government. The Court emphasized that the assessment must be a fair estimate based on available material, and profits should be determined solely on cash payments received, not including the cost of supplied materials. This ruling clarifies that the real value of the contract is the total value minus the cost of materials supplied, establishing a clear principle for future assessments under Section 145 of the Income Tax Act.