TMI Blog2015 (9) TMI 1551X X X X Extracts X X X X X X X X Extracts X X X X ..... ection 194B do not apply to horse racing. Amendment brought about by Finance Act of 2001 to Section 2(24) and 194B would have no bearing on the income earned from 'owning and maintaining horses'. - Decided in favour of assessee Deletion of the demand raised by the AO u/s 201 (1) and 201(1A) of the Act by applying the threshold limit of ₹ 2500 on each payment for making TDS u/s 194BB - grievance of the Revenue is that the basic limit is on the aggregate payment made in a year and not on each payment - Held that:- CIT (A) had followed the order of this Tribunal in assessee’s own case for A.Ys 2002-03 to 2008-09 in granting relief to the assessee. Since the CIT (A) had followed the precedent on the issue and the Revenue has not been a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ee on 11.02.2013. During the survey operation, the survey party observed that the assessee is not making TDS on payments of stake money disbursed amongst the winning horse owners and also on payments made under the head winnings from Horse Races , share of income to other centres / royalty to other centres . Therefore, assessee was asked to explain as to why it is not to be treated as Assessee in Default u/s 201(1) for failure to comply with the TDS provisions u/s 194B, 194BB and 194H of the I.T. Act. The assessee submitted its replies vide letters dated 28.2.13, 11.3.13, 10.3.13 and 15.3.13. After considering the written submissions and also the findings of the survey party, AO observed that section 194B has been widened by the inserti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... efore, asked to explain as to why it should not be treated as assessee in default for short deduction of TDS u/s 194BB of the Act. Vide its letter dated 13.03.2013, assessee explained that as per the practice, assessee has been deducting tax at applicable rates on the winnings after deduction of base threshold limit of ₹ 2500 and is depositing the same to the govt. account. It was submitted that the same issue had arisen in A.Y 2008-09 as well and the CIT (A), after careful consideration of the fact, had decided the issue in favour of the assessee accepting the basic deduction of ₹ 2500 and that the order of the CIT (A) has been affirmed by the ITAT in its order dated 23.04.2010. The AO however, held the assessee to be an ass ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ions and the material on record, we find that the AO has applied the provisions of section 194B to the payments made to horse owners as stake money on the ground that by insertion of words or card game and other game of any sort w.e.f. 1.6.2001, the horse racing income comes under the ambit of other game of any sort , we find that this issue had arisen in the case of Bangalore Turf Club Ltd. Vs. Union of India and others and the Hon'ble Karnataka High Court in the writ petition filed by the Bangalore Turf Club has dealt with this issue at length and has held that the amended provision of section 194B do not apply to horse racing. The relevant portion of the judgment of the Hon'ble High Court is reproduced hereunder for ready re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... se owners. 61 . Explanation (ii) to sub-section (ix) of section 24 came to be inserted by Finance Act, 2001. It is an inclusive definition. The term or any other similar game found in Explanation (ii) will have to be ejusdem generis and so also the term any other similar game found in section 2(24)(ix) of the Act. On advent of game shows involving prize money being telecast through electronic media and said prize money having not found its place in the definition clause of Income under the Income-tax Act, 1961, Legislature introduced Explanations (i) and (ii) to sub-clause (ix) of sub-section (24) of section 2 so as to include such prize money also under definition of income , since in those events people would compete with e ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s who compete with each other and win prizes in any game show or entertainment programme on television or electronic media and games similar to it. Hence, stake money which is paid to race horse owners on their horses being placed 1, 2 or 3 onwards in a horse race cannot form the genus of the words found in Explanation II to section 2(24)(ix) nor it can be held that such winnings would fall within the words and other game of any sort found in section 194B. 63 . Hence, this Court is of the considered view that amendment brought about by Finance Act of 2001 to Section 2(24) and 194B would have no bearing on the income earned from 'owning and maintaining horses'. In other words, the term 'any other similar game' fou ..... X X X X Extracts X X X X X X X X Extracts X X X X
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