K. PACKIRISAMY NADAR VS COMMISSIONER OF INCOME-TAX
2001 P T D 295
[238 I T R 1039]
[Madras High Court (India)]
Before M. S. Janarthanam and Mrs. A. Subbulakshmy, JJ
K. PACKIRISAMY NADAR
versus
COMMISSIONER OF INCOME‑TAX
Tax Case Petition No.754 of 1997, decided on 25/02/1998.
Income‑tax.
‑‑‑‑Income from lottery ‑‑‑Encashment of lottery ticket by illegal exchange‑ Assessed as income from other sources‑‑‑Reference‑‑‑Questions as framed did not arise for consideration‑‑.‑Indian Income Tax Act, 1961 S.256(2).
The assessee claimed to have purchased a lottery ticket and won the second prize of Rs.11,00,000. He claimed to have initially deposited the ticket with the State Bank of India and took it back subsequently and encashed it through lottery agents for a sum of Rs.6,23,000. The assessee claimed that he had taken Rs.1,23,000 as his share and the balance amount was given equally to his two sons and two daughters‑in‑law as he claimed to have purchased the ticket jointly with them. The said amount of Rs.6,23,000 was assessed as income of the assessee treating it as income from other sources in view of his sworn statement that he alone purchased the ticket. It was also ascertained from the Joint Director (Lotteries) that the said ticket had been submitted by B of Bombay. The Commissioner of Income‑tax (Appeals) and the Tribunal confirmed the assessment. The reference application filed by the assessee was dismissed. Oil an application under section 256(2) of the Income Tax Act, 1961, requiring a direction to refer the following question of law: (1) Whether, on the facts and in the circumstances of the case, the Tribunal was right in holding that the entire lottery receipt was to be assessed only in the hands of the assessee; (2) Whether, on the facts and in the circumstances of the case, the Tribunal was justified in arriving at the conclusion that the onus always lay on the person who alleged the transaction in spite of the fact that the assessee discharged his obligation as contemplated under the statute by bringing all evidence at his command to the Department:
Held, rejecting the reference application, that the prize winning ticket had not been presented and encashed by the assessee. The fact was that one B of Bombay presented the ticket and encashed the amount. Therefore, the amount of Rs.6,23,000 allegedly received by the assessee could have been only by the illegal change and sale of the lottery ticket. That being so, the tax authorities, inclusive of the Tribunal found that the said income of the assessee was income from other sources and he had been accordingly subjected to tax under the Income‑tax Act. Therefore, the questions as framed did not arise for consideration.
P.H. Arvind Pandian for Padmanabhan and Ramamani for the Assessee.
Mrs. Chitra Venkataraman for the Commissioner.
JUDGMENT
M. S. JANARTHANAM, J.‑‑‑The assessee, Sri Packirisamy Nadar, Udaiyandu, Peravurni Taluk, Thanjavur District, is an agriculturist. It appears that the assessee purchased a lottery ticket of the Manipur State Lottery in the draw held on February 28, 1988. The lottery ticket he purchased, it is said, won the second prize of Rs.11,00,000. He appeared to have deposited the prize winning ticket with the State Bank of India, Thiruthuraipoondi, at the first instance. For some reason or other, he appeared to have got back the lottery ticket from the State Bank of India, Thiruthuraipoondi, and handed over the same to the lottery agents, Mr. N. Devarajan and T. Kalyanasundaram. Through the said lottery agents, he appeared to have received Rs.6,23,000. He would claim that the said lottery ticket had been purchased jointly by him, his two sons and two daughters‑in law. He would further claim that he had taken Rs.1,23,000 to his share and the balance amount was given equally to his two sons and two daughters‑in- law. This sort of a claim of the assessee was not at all acceded to in view of his ‑sworn statement that he alone purchased the ticket and initially deposited the same for encashment with the State Bank of India, Thiruthuraipoondi. It was also ascertained from the Joint Director (Lotteries), Government of Manipur, that the said prize winning ticket HBC 202136 of the 120th draw (Bumper) of Manipur State Sports Lottery held on February 28, 1988, had been submitted by one Mr. Bhalchand. Krishna Karter of Bombay.
Since the assessee had not submitted the prize winning ticket himself, and encashed the amount and received a sum of Rs.6,23,000 through lottery agents, the said amount was treated as income from other sources and he was taxed accordingly by the Assessing Officer.
The appeal preferred before the Commissioner of Income‑tax (Appeals) was also dismissed. The further appeal filed before the Tribunal was also dismissed, confirming the order of assessment, as had been confirmed by the Commissioner (Appeals).
The assessee also filed a reference application before the Tribunal and the same had been dismissed, giving rise to the present action‑‑ T.C.P. No. 754 of 1997 requiring direction to the Tribunal to state a case and refer the following two questions of law for the opinion of this Court.
"(1) Whether, on the facts and in the circumstances of the case, the Tribunal was right in holding that the entire lottery receipt was to be assessed only in the hands of the applicant therein?
(2) Whether, on the facts and in the circumstances of the case, the Tribunal was justified in arriving at the conclusion that the onus always lie on the person who alleges the transaction in spite of the fact that the applicant discharged his obligation as contemplated under the statute by bringing all evidences at his command to the Department?"
The Tribunal found that the question as stated above, are not at all referable questions of law, arising out of the order of the Tribunal and consequently, dismissed the reference application. On our part, we feel that a cursory perusal of the questions framed indicates that those questions had been wrongly framed on a total misconception of facts and such question shall never arise for consideration, on the facts and in the circumstances of the case. We have stated for the sake of emphasis that the prize winning ticket had not been presented and encashed by the assessee. But, the sordid fact is that one Mr. Balchand Krishna Karter of Bombay presented the ticket and encashed the amount. Therefore, the amount of Rs.6,23,000 allegedly received by the assessee could have been only by the illegal exchange and sale of the lottery ticket. That being so, the tax authorities, inclusive of the Tribunal found that the said income of the assessee was income from other sources and he had been accordingly subjected to tax under the Act. Such being the case, we are unable to comprehend as to how the questions as framed shall ever arise for consideration at all.
In this view of the matter, this tax case petition deserves to be dismissed, the same and is accordingly dismissed. No costs.
M.B.A.187/FC
Petition dismissed.