1983 (5) TMI 39 - AT - Income Tax

Summary

Issues:
1. Whether the prize money of Rs. 30,000 received by the assessee for participating in a contest is taxable income or exempt under section 10(17A) of the Income-tax Act, 1961.

Analysis:
The appeal before the Appellate Tribunal ITAT Allahabad-B involved the assessment year 1979-80, where the assessee received a prize of Rs. 30,000 for winning a caption writing contest organized by Bombay Dyeing & Manufacturing Co. Ltd. The Income Tax Officer (ITO) included this amount in the assessee's total income, which was upheld by the Additional Commissioner of Income Tax (AAC). The assessee contended that the prize money should be considered exempt under section 10(17A) or as a windfall. The counsel for the assessee argued that the winnings were not akin to lottery winnings and should be considered as awards for literary work, thus qualifying for exemption. On the other hand, the departmental representative relied on the orders of the revenue authorities to support taxation of the prize money.

The Tribunal analyzed the nature of the prize money received by the assessee and referred to legal precedents to determine the character of "income." Citing the broad definition of income, the Tribunal noted that the prize was a result of the assessee's skill, exertion, and effort in the contest. The crucial aspect was whether the income qualified for exemption under section 10(17A) of the Income-tax Act. The section provided exemption for awards related to literary, scientific, artistic work, or proficiency in sports and games, instituted or approved by the Central or State Government. Despite the assessee's argument, it was found that the contest prize did not fall under the categories specified in section 10(17A) and was not instituted or approved by the government for exemption purposes. Consequently, the Tribunal agreed with the revenue authorities that the prize money of Rs. 30,000 was taxable and should be included in the assessee's total income.

In conclusion, the Tribunal held that the prize money received by the assessee for participating in the contest was taxable income and not exempt under section 10(17A) of the Income-tax Act, 1961. The appeal filed by the assessee against the order of the AAC was dismissed, affirming the inclusion of the prize money in the assessee's total income.