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TMI Blog2021 (12) TMI 511X X X X Extracts X X X X X X X X Extracts X X X X ..... fer of incentive to retailers. The person responsible for making the payment is the government. Admittedly, the government after affecting TDS has paid the amount to the assessee towards prize incentive etc. The assessee has collected the amount and claims to have made over the incentive to the end retailers. Section 194G, as rightly held by the Commissioner of Income Tax and the Tribunal, is not attracted to the instant payment inasmuch as assessee is not under obligation to pay towards commission etc to any of these persons. The substantial questions of law framed by the Revenue are examined by keeping in perspective the confirming order of the Tribunal. And the findings of facts recorded by the Tribunal on which no exception is pointed out to the effect that Sections 194H and 194G are not attracted. It is definitely a case for consideration of substantial questions of law, had the Revenue established the basic ingredients required for attracting any one of the sections to the controversy covered by the appeal. We are of the view that the assessee being a wholesale dealer/Stockist of lottery has purchased from the government and sold to the retailers. It is accepted as a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 3. Heard learned Senior Standing Counsel Mr.Christopher Abraham for Revenue and learned Counsel Mr.Anil Sivaraman for assessee. Both the counsel refer to and rely on the details covered by I.T.A. No.18/2017 and stated that advertance to the details in I.T.A. No.18/2017 would be sufficient for disposing of the other two appeals as well. 4. One T Murugan was the Proprietor of M/s.Meenakshy Lucky Centre/a proprietory concern doing business as a wholesale dealer of lottery tickets. The assessee was engaged in the said business as Stockist for the sale of lottery tickets of various government/quasi-government agencies and State governments. The assessee purchases lottery tickets from the agencies referred to above and claim to sell the lottery tickets to the retailers. In the subject financial year, the assessee purchased lottery tickets from the State of Kerala and claims to have sold to the retail vendors. The assessee in the Tax return for the Assessment Year 2008-09 returned total income of ₹ 1,62,45,266/-. The return filed for the subject Assessment Year was taken up for scrutiny and resulted in issuance of notice under Section 143(2) of the Act. The notice refe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... deduction of tax at source u/s.194H/194G of the Income Tax Act from the payment of commission to subagents? 3. Should not the Tribunal have considered the issues raised (declined to be considered in paragraph 12 of the order on merits? 6. The learned Counsel appearing for the parties have, in great detail, invited our attention to all the three orders of the authorities filed as Annexures A to C. The arguments now made in support of the respective cases by the learned counsel are similar to the arguments made before the CIT(Appeals) and the Tribunal. The Revenue contends that from the nature of admitted circumstances and the conduct of lottery business, the assessee, though a Stockist or wholesale dealer of lottery tickets organised by the State of Kerala, upon purchase of the lottery tickets, is dealing with conduit sellers as agents. Even assuming without admitting that the agents' prize money, commission, etc are received by the assessee, but is transferred to respective sellers of lucky lottery tickets. The assessee is paying or transferring the amount so received as commission etc to the agents. In the foremost consideration of entries, Section 194G of the Act is at ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... organising agency and, by retaining a margin of the discount so received, lottery tickets were sold to retail sellers. Hence, none of the incidences covered by Section 194 G or Section 194 H is attracted. At this juncture, to avoid reiteration of what has been held as a fact we deem it very useful to refer to the consideration of this aspect by the CIT (Appeals). In his order dated 04.06.2013, the learned CIT (Appeals) first had taken up for consideration the scope and applicability of Section 194H of the Act to the controversy in the subject assessment, and, thereafter, examined whether the sub-dealers purchasing lottery tickets from the assessee had rendered any service to the assessee in the course of buying or selling of goods in relation to any transaction relating to any asset, valuable article or thing. And on this crucial aspect, the first appellate authority recorded a finding that the buyers of lottery tickets from the assessee do not render service in the sale and purchase of lottery tickets between two of them. Therefore, in the absence of any service being received to the assessee it cannot be held that Section 194H is attracted. Thereafter, applicability of Section 19 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... istributing, purchasing or selling lottery tickets, only income by way of commission, remuneration or prize (by whatever name called) on such tickets in an amount exceeding one thousand rupees shall, at the time of credit of such income to the account of the payee or at the time of payment of such income in cash or by the issue of a cheque or draft by any other mode, whichever is earlier, deduct income tax thereon at the rate of ten per cent 10.2 The assessee acts as a post-office by receiving counterfoils of prize winning tickets sold by different retailers in the organisation of lottery business presented to the State government and the prize/incentive/bonus received from the government is transferred to retailers. In the circumstances of the case our attention has been drawn to the flow of counterfoils into the hands of assessee and presentation of counterfoils to government and receipt of incentive by assessee and subsequent transfer of incentive to retailers. The person responsible for making the payment is the government. Admittedly, the government after affecting TDS has paid the amount to the assessee towards prize incentive etc. The assessee has collected the amount an ..... X X X X Extracts X X X X X X X X Extracts X X X X
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