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TMI Blog1989 (1) TMI 172X X X X Extracts X X X X X X X X Extracts X X X X ..... prize, though by means of his professional activities, purely by chance and not on account of any contract. The reliance placed by the assessee on the ratio of decision of Madras High Court in CIT vs. G.R. Kartikeya (1980) 17 CTR (Mad) 301 : (1980) 124 ITR 85 (Mad) was found to be reasonable by the ITO and accordingly Rs. 30,000 was treated as not liable to income-tax. There were certain additions made to the professional income, for which the assessee had preferred appeal to the AAC and he had allowed certain relief to the assessee. 3. The CIT under s. 263 was of the view that Rs. 30,000 was assessable in the hands of the assessee and to this extent he had held the order of the ITO to be erroneous and prejudicial to the interest of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on that the draftsman was not aware of the meaning given to this word in its modern sense. A statute cannot be taken to use words in their archaic sense. The modern usage is to show that the winnings are to be taken as applied only to money won by chance as a kind of windfall as in a lottery, a horse race, gambling or betting. Though a prize is won, all winnings cannot be equated to prizes. If counsel were right, prizes won, say, in a garden competition, would have to be taxed. We do not find this to be the legislative intent. The learned counsel for the Commissioner pointed out that if the above construction was correct or was intended by Parliament, then the words "any winnings from gambling or betting of any form of nature whatsoever" wo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nnings from lotteries, races, card games, etc. The bill seeks to make the following amendments to the IT Act with a view to withdrawing the exemption currently available in respect of casual and non-recurring receipts". Prior to this amendment, the person who had this kind of windfall from lotteries, races, card games, etc., were completely free from having to pay any tax, while the persons who earned by the sweat of their brow had to pay the tax levied under the Act. This was an anomaly especially in an egalitarian society. This is also inconsistent with the cardinal doctrine of taxation based on ability to pay. Bearing these aspects in mind, Parliament has brought in the relevant provisions so as to tax receipts by chance winnings or wi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y the winnings leaving alone the losses. Winning prize of this kind cannot be a habit. There is no possibility of such an adjustment for loss in a case of this kind. Sec. 74A thus supports the construction placed above. Reliance was placed during the course of the argument on s. 10(3) on behalf of the Revenue. It does not appear to support the contention put forward. That is a provisions which exempted the receipts of casual or non-recurring nature to the extent such receipts did not exceed one thousand rupees in the aggregate. However, even the exemption of one thousand rupees would not apply to winnings from lotteries. Therefore, the use of the expression "not being winnings from lotteries" does not in any manner suggest that the other ki ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g the said ruling we have only to quash order of the CIT. 5.1. On the issue of merger, it would be a difficult proposition for this Bench to come to conclusion that the AAC had examined this issue in appellate proceedings. The reason for coming to this conclusion is that the ITO had never considered the income from photography competition as part of the profession income and the AAC also while examining the professional income had not touched at all that part of it. There are divergent views on the issue of merger. As some Courts have held that since the AAC has the authority of examining all that the ITO had examined, it should be concluded that the AAC had in fact considered all the matters as were done by the ITO, while some other Cour ..... X X X X Extracts X X X X X X X X Extracts X X X X
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