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2022 (11) TMI 459 - ITAT MUMBAICorrect head of income - income earned from unsold lottery tickets as “income from other sources” OR “income from business” - HELD THAT:- As per the assessee, all the transactions relating to its business has resulted in income from business. The purchases, losses, unsold stock of lottery tickets, expenditure and all the activities are pertaining to business only. Further, the assessee being a seller / trader, all/any income generated from lottery tickets is exclusively in the nature of business income, unlike in case where the person earned income from lottery tickets by winning the prize. As per the assessee, it has not purchased the lottery tickets with a chance to win the prize and the same were purchased in the course of business for the purpose of trading and, therefore, income arising therefrom can be taxed only under the head “Income from Business”. Also submitted that in the course of lottery dealing, every dealer ends up with some quantity of lottery tickets unsold at the end of draw, which are not taken back by the main distributor. In such circumstances, purchase price paid by the lottery dealer to the extent of unsold lottery tickets is loss. However, this loss is mitigated by prize money attributed to prize winning lottery tickets out of unsold lottery tickets lying with the trader. We find that in Pooja Marketing [2021 (5) TMI 793 - ITAT MUMBAI] dealt with a case, wherein the taxpayer was carrying out business as a “Sole State Level Distribution” for distributing lottery tickets in the State of Maharashtra and in this process has won prize from unsold lottery tickets, which were not taken back by the main distributor. Thus held such prize money from unsold lottery tickets as “income from business” of the taxpayer firm. A.R. during the course of hearing placed reliance upon the agreement entered with the Government of Maharashtra, which was filed by way of an application seeking admission of additional evidence. The assessee also placed on record its appointment letter as “Stockists”, inter–alia, for the State of Maharashtra, as part of the compilation of additional evidences. As per the assessee, these documents could not be filed before the lower authorities as the hearing before the learned CIT(A) was concluded only on the basis of partial submissions filed by the assessee. In view of the above, we admit the aforesaid additional evidences filed by the assessee. We find that since these documents were not available with the lower authorities, therefore, no findings have been rendered on them. Accordingly, we deem it fit and appropriate to restore this issue to the file of the Assessing Officer for de novo adjudication after considering the additional evidences filed by the assessee before us and in the light of the aforesaid decision of the Co–ordinate Bench of the Tribunal rendered in Pooja Marketing (supra). Grounds raised by the assessee are allowed for statistical purposes.
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