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TMI Blog1997 (12) TMI 37X X X X Extracts X X X X X X X X Extracts X X X X ..... om the lottery by Shri R. Sethu and others were not assessable in the status of association of persons or body of individuals and that four separate assessments must be made on the four individuals separately as co-owners in respect of their shares ?" The brief facts leading to the tax case reference are as under : One R. Sethu, is an assessee. The assessee with his father, M. Ramalingam Pillai, his brother-in-law, S. Narayanan, and his mother-in-law, Smt. Seetha lakshmi purchased four lottery tickets sold by the Directorate of Small Savings and State Lotteries, Government of Rajasthan, Jaipur. The said four persons entered into an agreement on January 30, 1982, to share the prize money received by them equally. The ticket purchased beari ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... onclusion that each co-owner signed an affidavit before the Commissioner of Oaths of this court affirming that each had a 25 per cent. share in the prize money and the Director of Rajasthan State Lotteries deducted 20 per cent. out of the prize amount of Rs. 10 lakhs and the balance of Rs. 8 lakhs was paid to each co-owner at the rate of Rs. 2,00,000 each. The Commissioner of Income-tax (Appeals), therefore, held since the cheques were received by the co-owners the prize winner acquired the income only when the Director of State Lotteries issued the cheques and not before that date and, therefore, he came to the conclusion that the correct assessment year in which the assessment should be made was 1983-84. He also upheld the contention of t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... conclusion that the status of body of individuals cannot be adopted and dismissed the appeals preferred by the Revenue. The Revenue has challenged the order of the Appellate Tribunal in so far as it relates to the question of status of the association to be adopted. It is fairly stated by learned counsel for the Revenue, Mr. C. V. Rajan, that the other order of the Appellate Tribunal holding that the other persons cannot be regarded as benamis and the assessee should be assessed only to the extent of two lakhs rupees has become final, and it is only against the other order of the Appellate Tribunal regarding the status of the assessee to be adopted, the Revenue had filed a reference application and the Tribunal has referred to the questi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ree others joined together and purchased a lottery ticket with the object of earning income. There was a joint venture and the object of the joint venture was to earn income and since both the conditions are satisfied, we are of the view that the status to be adopted for such association can only be body of individuals. In a similar factual situation, this court in CIT v. A. U. Chandrasekharan [1998] 229 ITR 406, held as under: "Thus a plain appreciation of the facts arising in this case would go to show that ten persons by entering into an agreement created a joint venture for purchasing the lottery tickets and the object of purchasing the lottery tickets was to win a prize. The ten persons together appointed one person for purchasing th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that the entire sum of Rs. 10,00,000 should be assessed in the hands of the assessee in his individual assessment, and another in the status of body of individuals. The Appellate Tribunal has rendered its finding with reference to the taxability of the sum of Rs. 10 lakhs in the hands of the assessee as an individual and in that context, the Tribunal held that the other three persons cannot be regarded as benamidars of the assessee and the assessee would be assessable only at a sum of Rs. 2 lakhs. The above finding of the Appellate Tribunal, in our view, should be taken as only declaring the right of the assessee to receive a part of the amount won in the lottery and it cannot conclude the question of the status of the assessee in which th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of body of individuals cannot be adopted and we have already held that the order of the Appellate Tribunal is erroneous in law and we have come to the conclusion that the proper status to be adopted is body of individuals as was done by the Income-tax Officer though in a protective manner. The acceptance of the order of the Appellate Tribunal in the individual assessment of the assessee, in effect, would mean that the other order made in a protective manner in the status of association of persons becomes operative as there cannot be two assessments with reference to the same assessee. The effect of the order holding that three other persons were not benamidars of the assessee and the assessee was liable to be taxed only for a sum of Rs. 2 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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