9911796707
TMI Blog1991 (8) TMI 137X X X X Extracts X X X X X X X X Extracts X X X X ..... ditional income under the Amnesty Scheme had been declared by the assessee at Rs. 3,50,000. This additional income was disclosed by the assessee in the revised return of income filed on30th September 1986. 3. In the original return, filed on27-7-1984, as well as in the revised return filed on30th September 1986, the assessee declared income from lottery receipts at Rs. 10,80,000 claiming deduction under section 80TT. As per documents filed with the return, the assessee claimed to have won a prize of Rs. 12,00,000 on ticket No. W-2665871 in Draw No. 20 of Kanchanjunga Weekly Lottery of Government of Sikkim, held on19-9-1983. In view of the facts stated above, the Income-tax Officer proceeded to make comprehensive enquiries relating to the genuineness of the assessee's claim of having won the prize of Rs. 12,00,000 on lottery ticket No. W-2665871. The documents filed by the assessee, along with the original return, showed that he had been paid Rs. 9,71,940 by the Director of State Lotteries, Government of Sikkim, Gangtok through demand draft No. TL/445817 dated 22-11-1983, drawn in favour of the assessee on account of prize money of Rs. 12,00,000, after making the following deducti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y of Rs. 9,71,940 was paid to Sh. Rastogi by Director of State Lotteries, Sikkim on 23-11-1983 but the bonus prize to Sh. Milkhi Ram, the alleged seller of the prize winning ticket, was paid by M/s K Co. on 3-11-1983 i.e. even before the said prize bonus was deducted from the prize money payable to Sh. Rastogi. 5. According to the Income-tax Officer, the above mentioned facts conclusively proved that the prize winning ticket was not available for sale inDelhiby15-9-1983, the same being under despatch fromBombaytoNasik. The Income-tax Officer recorded the statements of the assessee, Milkhi Ram and Ravi Goel, a partner of M/s K Co.,New Delhion various dates. Statement of Milkhi Ram was recorded on20-5-1985,27-7-1987and3-8-1987. Shri D.C. Rastogi was examined on 27-41985 and10-7-1987and the statement of Ravi Goel was recorded on19-8-1985and15-7-1987. Materials gathered by the Income-tax Officer, on the basis of enquiries made by him, were put to the assessee, who was given an opportunity of being heard in respect of those materials. This was done by the Income-tax Officer vide his letter dated 11-8-1987 and on the assessee's request, copies of statements and other documents, coll ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... including the prize winning ticket had not been sent to Nasik and that the prize winning ticket was sold in Delhi through Milkhi Rain. According to the submissions made on behalf of the assessee before the CIT (Appeals), M/s K Co. being liable to tax in respect of the agents and stockists, commission to the tune of Rs. 96,000 created dummy parties like M/s Chawla Agencies and M/sRajivAgenciesto divert income, taxable in its hands. It was submitted that the deposition of Milkhi Ram showed that it was he who had sold the prize winning ticket and that he was given the prize money of Rs. 24,000. It was further contended that addition was not based on any concrete evidence, but solely on surmises and conjectures. 7. The CIT (Appeals) on a consideration of the submissions made on behalf of the assessee and the materials available on the record, concluded that the assessee's claim that he had purchased the prize winning ticket in normal course, was not true. According to him the assessee as well as Milkhi Ram were putting up only a make believe story. The CIT (Appeals) discussed the statements of the assessee and Milkhi Ram in detail and concluded that the claim that Milkhi Ram had so ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... real owner. In support of the contention that the prize winning ticket was purchased by the assessee from Milkhi Ram it was further submitted that the counterfoil of the prize winning ticket was produced by Milkhi Ram for claiming the commission of Rs. 24,000, a fact which further corroborated the assessee's version that he had purchased the prize winning ticket from Milkhi Ram. It was then submitted that the letter of the Director of Sikkim State Lotteries dated 23-11-1983, a copy whereof is at page 14 of the paper book showed that the claim in respect of the prize winning ticket was filed by the assessee and he was paid a sum of Rs. 9,71,940 by demand draft No. TL/445817 dated 22-11-1983 and that pursuant to that claim he was paid the prize money of Rs. 9,71,940 after deduction of a sum of Rs. 1,20,000 on account of commission payable to stockist, agent and seller (counterfoil holder) and further deduction on account of income-tax payable on account of Sikkim State Income-tax. All these facts, according to Shri S.B. Gupta, fully established that the assessee was the genuine holder of the prize winning ticket. According to him, the evidence collected by the department did not prov ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd tickets, including the prize winning ticket, were sent to M/s Rajiv Agencies, Nasik. Thus, according to Shri Gupta, the prize winning ticket had not moved out ofDelhi, a circumstance, which further lent corporation to the assessee's version that the prize winning ticket was in fact sold inDelhiand not inNasikor any where else. According to Shri Gupta, the Income-tax Officer ought to have made enquiry as to how the remaining lottery tickets out of 24 lakh tickets, printed by Thomson Press (India) Limited, were disposed of by the Organising Agent. The Income-tax Officer failed to do so even though he was requested by the assessee to make necessary enquiries in this regard. In support of the contention that the prize winning ticket was not despatched toBombayor toNasik, our attention was invited to pages 19, 20 and 21 of the paper book. Pages 19 and 20 of the paper book, purported to be photostat copies of invoice No. 11678 dated15-9-1983, through which 8,000 lottery tickets including the prize winning ticket were sent by M/s Chawla Agencies to M/sRajivAgencies,Nasik. Shri Gupta pointed out various discrepancies in the photostat copies at pages 19 and 20 in order to show that these ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ased the prize winning ticket. It was also submitted by Shri Gupta that M/s K Co. was interested in fabricating evidence in order to avoid payment of tax on a sum of Rs. 96,000, comprised of two sums of Rs. 84,000 and Rs. 12,000 payable as commission/bonus to the agents and stockists respectively in respect of the prize winning ticket. Shri Gupta next referred to the bank statement of the assessee, a copy whereof is at pages 58 and 59 of the paper book in support of the contention that this statement did not show that during the material period the assessee was continuously staying in Delhi. It was submitted that the assessee had to go toBareillywhere his mother-in-law was ill and that for this reason the claim in respect of the prize winning ticket could not be filed promptly by the assessee and that it was filed with M/s K Co. on29-10-1983. According to Shri Gupta the assessee would not have paid Rs. 13 lakhs for purchasing the prize winning ticket. Shri Gupta then submitted that the onus to prove that the apparent was not the real was on the party who claimed it to be so. In support of this contention reliance has been placed on the decisions of the Supreme Court in Parimise ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ticket after the result of the draw had been declared. The ticket was purchased by him on premium and, therefore, the ITO was justified in adding the sum of Rs. 13 lakhs as income of the assessee from undisclosed source. It was further submitted that the CIT (Appeals) was not justified in restricting the amount of addition to Rs. 10,80,000. 13. We have considered the rival submissions as also the facts on record. We have also perused the paper book filed by the assessee and have also considered the case laws cited at the bar. M/s K Co. as Organising Agents of Kanchanjunga Weekly Lottery got 72 lakhs tickets printed for 20th draw. Out of 72 lakhs lottery tickets, 24 lakhs tickets with Nos. 2300001 to 2900000 in four series of W X Y Z including the prize winning ticket No. W-2665871 were got printed by M/s Thomson Press (India) Ltd.,Faridabad. There cannot be a serious challenge to the fact that these 24 lakhs tickets were delivered by M/s Thomson Press (India) Ltd.,Faridabadto M/s K Co.New Delhiand according to the delivery challan, a copy of which is at page 17 of the paper book, 24 lakhs tickets were delivered on5-9-1983. It was not at all necessary for the Assessing Office ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... epancies in paper No. 21 also which is the letter of Chawla Agencies dated6-10-1983. In respect of this paper also the assessee insisted upon production of the original, which was, however, not done. We, therefore, exclude this paper from consideration. However, the fact remains that it is conclusively established from the materials and evidence gathered by the Income-tax Officer, during the course of assessment proceedings, that 40,000 lottery tickets, including the prize winning ticket, were in fact sent to Bombay by air on 9-9-1983. This fact is a relevant circumstance which goes to support the case of the department that the prize winning ticket was not purchased by the assessee inDelhiin normal course. We, however, agree with the view canvassed on behalf of the assessee, on the strength of the decisions of the Supreme Court on the point that the onus was on the department to show that the apparent was not the real and that the assessee was not the genuine holder of the prize winning ticket. The taxing authorities while deciding the point whether the transaction is genuine and the apparent is not the real can take, into consideration the circumstances surrounding the transactio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... one person from who he had purchased lottery tickets. Further, Milkhi Ram does not maintain any account what-so-ever in respect of lottery business. Not only that, he was not able to produce a single counterfoil of any lottery ticket or even unsold lottery ticket. From the facts, stated by him in course of his statement, recorded by the ITO on three different dates, we are satisfied that he was not at all carrying on the business of selling lottery tickets. There is no other evidence available on the record except the statement of Milkhi Ram to show that this man was engaged in the business of selling lottery tickets. On the other hand, the facts stated by him in course of his statement, negatived his contention that he used to sell lottery tickets and so we are inclined to agree with the inference drawn by the ITO and first appellate authority that Milkhi Rain was not carrying on the business of selling of lottery tickets, as claimed by him. 16. Yet another circumstance which creates a serious doubt about the truthfulness of the version given by Milkhi Ram is that even though he does not remember the name of a single person from whom he purchased the lottery tickets, he was able ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... stances brought on record thus clearly go to show that the story given out by Milkhi Ram about having sold the prize winning ticket and about having received a commission of Rs. 24,000 was a make-believe story. 18. According to the statemant of Milkhi ram, he did not know the name of the person who won the first prize of Rs. 12 lakhs. It was further stated by him that the winner of the prize had not made any entry in the counter-foil of the ticket. The statement of Milkhi Ram that he did not know the name if the person who won the first prize of Rs. 12 lakhs eliminates the possibility of his having put down the name and address of the assessee on the counter-foil as the person who had purchased the ticket and had won the first prize of 12 lakhs. The assessee, in course of his statment recorded on time of purchase of the ticket either on the counter-foil or on the ticket. The statement of Milkhi Ram clearly goes to show that name of the person who had purchased the prize winning ticket was not noted in the counter-foil otherwise he would have known the name of that person as his case was that the counter-foil was with him. From the evidence gathered by the ITO it was found that th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ment of his mother-in-law and, therefore, he could not get time to look into personal matters. He admitted that he was not atBareillythroughout that period. When asked by the ITO when he first came to know about the winning of prize, the assessee stated that he came to know about winning of the prize one or two days before he filed the claim on 29-10-1983. He further stated that since he did not know that he could win the lottery, the ticket had been lying casually in various papers in the drawer. When he put papers in order, he came across the ticket and tallied the numbers with the results declared. It was then that he knew that he had won the lottery. He then lodged his claim. This version is at variance with the version given by him on27-4-1985. According to his second version, the lottery ticket got mixed with other papers and it was retrieved by him while he was putting his papers in order. This, according to him, was this reason for the delay in lodging the claim in respect of the prize winning ticket. His earlier version also stood disproved by his bank statement, a copy whereof is at pages 58 and 59 of the paper book, which clearly goes to show that during the months of Se ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... orded by the Income-tax Officer. The assessee also filed written submissions before the CIT (Appeals), a copy whereof is at pages 56 and 57 of the paper book. Before the CIT (Appeals) also the ITO did not make any grievance to the effect that he was not given an opportunity by the ITO to cross-examine the witnesses. The fact is that the assessee never wanted to cross-examine the witnesses. Had he wanted to cross-examine the witnesses, he would have made a request to the ITO to that effect and in that event the ITO would have given him an opportunity to cross-examine the witnesses. Not only that before us the assessee raised as many as five grounds assailing the addition made on account of unexplained investment and restricted to Rs. 10,80,000 by the CIT (Appeals). In ground No. 5 it was pleaded that natural justice has been violated as relevant information asked for by the assessee had not been supplied by the ITO. Even in the grounds of appeal, filed before the Tribunal, the assessee did not plead that he was not given any opportunity to cross-examine the witnesses. The contention raised before us in a half-hearted manner that the assessee was not given an opportunity to cross-exa ..... X X X X Extracts X X X X X X X X Extracts X X X X
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