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TMI Blog2015 (9) TMI 1551X X X X Extracts X X X X X X X X Extracts X X X X ..... the Companies Act, is carrying on the business of racing and promotes race meetings at its Malakpet Race Course, Hyderabad. The assessee is collecting entry fee and betting money from punters and utilizing the same for payments as winnings on horse race to punters, payment of stake money to horse owners and to meet the administrative cost and other expenses. 3. A survey operation u/s 133A of the Act was conducted in the premises of the assessee on 11.02.2013. During the survey operation, the survey party observed that the assessee is not making TDS on payments of stake money disbursed amongst the winning horse owners and also on payments made under the head "winnings from Horse Races", 'share of income to other centres'/'royalty to other ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the winning horses. He accordingly held the assessee to be "an assessee in default". As regards the non deduction of tax u/s 194BB from the winnings from horse race, the AO observed that the assessee is deducting tax u/s 194BB as per applicable rate on payments to punters after deducting the amount of Rs. 2500 from their payments. Therefore, according to him, the assessee is not deducting tax on the entire gross amount. Assessee was therefore, asked to explain as to why it should not be treated as "assessee in default" for short deduction of TDS u/s 194BB of the Act. Vide its letter dated 13.03.2013, assessee explained that as per the practice, assessee has been deducting tax at applicable rates on the winnings after deduction of base th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in default" u/s 201(1) of the Act. He accordingly raised the demand u/s 201(1) and 201(1A) of the I.T. Act. Aggrieved, assessee preferred appeal before the CIT (A) who granted relief to the assessee. Aggrieved, Revenue is in appeal before us for all the A.Ys. 5. The learned DR supported the orders of the AO while the learned Counsel for the assessee relied upon the order of the CIT (A). 6. Having regard to the rival contentions and the material on record, we find that the AO has applied the provisions of section 194B to the payments made to horse owners as "stake money" on the ground that by insertion of words 'or card game and other game of any sort' w.e.f. 1.6.2001, the horse racing income comes under the ambit of 'other game of any so ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ction 194BB provided for TDS to be made on 'winnings from race horses' with effect from 01.04.1978, the Circular 240 dated 17.05.1978 came to be issued clarifying that it did not apply to stake money. Hence, insertion of the words 'card game or other game of any sort' to section 194B with effect from 2001 would have no bearing on payment of stake monies paid by the Turf Clubs to the race horse owners. 61. Explanation (ii) to sub-section (ix) of section 24 came to be inserted by Finance Act, 2001. It is an inclusive definition. The term "or any other similar game" found in Explanation (ii) will have to be ejusdem generis and so also the term "any other similar game" found in section 2(24)(ix) of the Act. On advent of game s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t specified as such in the enactment. The nature of genus is gathered by implication from the express words which suggests it. 62. Now, turning my attention to the facts on hand and Explanation (ii) inserted by Finance Act, 2001 is perused and also read along with section 194B it can be easily inferred the legislature has intended to bring such income earned by the prize winning members who compete with each other and win prizes in any game show or entertainment programme on television or electronic media and games similar to it. Hence, "stake money" which is paid to race horse owners on their horses being placed 1, 2 or 3 onwards in a horse race cannot form the genus of the words found in Explanation II to section 2(24)(ix) nor it can be ..... X X X X Extracts X X X X X X X X Extracts X X X X
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