9911796707
TMI Blog1983 (3) TMI 79X X X X Extracts X X X X X X X X Extracts X X X X ..... last prize of Rs. 5, sold. During the year of account, one of the tickets sold by the assessee won a bumper prize of Rs. 10 lakhs. The assessee being a lucky seller became entitled to a bonus of Rs. 1 lakh. In the profit and loss account it was shown as bonus on the credit side. The assessee offered it as business income. The ITO assessed the same as business income. 2. The assessee appealed to the AAC. It was urged that it should have been assessed as income from lottery and, statutory deduction under section 80TT of the Income-tax Act, 1961 (' the Act '), should have been allowed. It was a chance receipt arising out of a prize winning ticket sold by it. Therefore, the bonus receipt should be held to be income from lottery and deduction ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... assessee, but there is no contribution by the assessee. He has only sold the ticket. The purchaser of the ticket won the lottery. Under the scheme, on the winning ticket the assessee was entitled for a bonus, but so far as the assessee is concerned, it is not income from lottery. He raised an additional ground contending that the AAC erred in entertaining the appeal without appreciating that the assessee has not claimed deduction under section 80TT in the return filed before the ITO. In this connection, he placed reliance on the decision in the case of Addl. CIT v. Gurjargravures (P.) Ltd. [1978] 111 ITR 1 (SC). The learned counsel for the assessee submitted that the entire facts so far as the bonus of Rs. 1 lakh received from the prize win ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ere already on record, and no new facts has been placed before the AAC, he was justified in entertaining the claim under section 80TT. The decision of the Supreme Court in the case of Gurjargravures (P.) Ltd. is distinguishable. That was a case where neither there was material on record to sustain the claim nor any claim was there. Hence, that decision has no application. 5. The business of the assessee was to sell the lottery tickets as sub-agent of Mysore Sales International Ltd. Under the scheme, apart from the commission on the sale of tickets, the assessee was entitled for a bonus on all the prize winning tickets, except the last prize of Rs. 5, sold. In this year, one of the tickets sold by the assessee won a bumper prize of Rs. 10 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e Department of Lottery, with the sole purpose of earning the commission thereon and it has so happened that in addition to the commission, the assessee was able to realise the sum of Rs. 6,69,152 also by way of prizes. The investment made on the tickets was declared as business expenditure. Thus, it was held that the receipt of Rs. 6,69,152 is income which has arisen out of business carried on by the assessee. The above ratio equally applies to the assessee's case. In fact, in that case, the assessee purchased the unsold tickets. Even then it was held that the receipt has arisen out of the business carried on by the assessee. In the instant case, the assessee did not purchase the lottery tickets, but on the other hand, sold the lottery tic ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ot intended that what was already taxed as business income should now be taxed as income from other sources. Persons like the respondent before us will continue to be assessed under business as it has arisen out of business carried on by the assessee in selling lottery tickets. Once it is income from business, it cannot be income from lottery. Others who do not carry on business in selling lottery tickets but win a prize on a lottery ticket purchased by them now pay tax under the head ' Income from other sources ' with the benefit of section 80TT deduction. Thus, on a careful reading of the provisions of the Act it is clear that deduction under section 80TT is allowable only to those persons who are taxed under other sources in respect of t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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