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TMI Blog1985 (9) TMI 110X X X X Extracts X X X X X X X X Extracts X X X X ..... d alone. On appeal, the Commissioner (Appeals) found that these activities have been recognised as a business carried on by the assessee and had been assessed as income from business for the earlier years and he, therefore, held that such income could not be assessed under the residuary head 'Income from other sources'. 8. In the appeals before us the contention of the revenue was that even though racing income of the assessee was being taxed as income from business in the earlier years it was assessable under the head 'Income from other sources' because the Income-tax Act, 1961 ('the Act') has been amended to assess such income only under that head and also there was a restriction on the carry forward and set off of the losses. It was su ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... include any winnings from races including horse races besides lotteries, etc., and such income was taxable under the head 'Income from other sources' by amendment of section 56 of the Act. Simultaneously section 74A of the Act provided that the loss from such source will be set off only against income from the same source. The memorandum explained in the Finance Bill stated that for this purpose each of the following sources, viz., lotteries, crossword puzzles, races including horse races, card games, other games of any sort, betting or gambling of any form will be regarded as a separate and distinct source. Thus, while losses from bridge may be set off against winnings from any other card game, these will not be set off against income from ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ead. Sub-section (2) provides that in particular and without prejudice to the generality of the provisions of sub-section (1) the following income shall be chargeable to income-tax under the head 'Income from other sources', viz., (i) dividends, (ib) income referred to in sub-clause (ix) of clause (24) of section 2. In other words notwithstanding the general view that income falling under the head 'Profits and gains of business or profession' will not be chargeable to tax under the head 'Income from other sources', a particular income specified in sub-section (2) has to be assessed only under the head 'Income from other sources'. Dividends is a case in point. There are cases where dividends are earned as part of the business activity and wo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... for bifurcating the income and making an assessment with regard to this income in accordance with the provisions of the Act. 10. In the result, all the assessee's appeals are dismissed except IT. Appeal No. 625 of 1984 which is partly allowed. Per Shri B.V. Venkataramaiah, Accountant Member --- I agree with the conclusions reached by my learned brother. 2. A decision of this Bench, to which I was a party, in First ITO v. Visweswaraiah Lucky Centre [1983] 5 ITD 132, was cited in favour of the assessee. That was a case where an agent of lottery tickets received a bonus on one of the prize winning tickets he had sold to a third party. The bonus received was admittedly income from business in that case. The question of treating it as in ..... X X X X Extracts X X X X X X X X Extracts X X X X
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