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2014 (5) TMI 159 - HC - Income TaxNature of income Prize money received on unsold tickets Business income OR income from any winnings from lotteries u/s 2(24)(ix) r. w section 115BB of the Act Held that:- The assessee was appointed as a Stockist by the State Government on payment of commission on the sale of lottery tickets - the assessee was appointed as a stockist on principle to principle basis and not an agent to sell tickets on behalf of the State Government - In case of non-intimation within 24 hours from the closing date of the draw about the unsold tickets through the telegraphic message, the unsold lottery tickets would be treated as sold and included in the draw and the assessee was made liable to pay the price of the tickets to the State Government - the assessee has not been held to be organizer of the sale and to conduct draw of the lottery thus, the amount of prize received on unsold lottery tickets is an income by way of winning prize from lottery - the prizes awarded to the assessee by draw of lots fall within the ambit of lottery and the amount gained falls within the ambit of income by way of winnings from lotteries. Relying upon Commissioner of Income-tax Versus Manjoo and Co. [2010 (9) TMI 754 - Kerala High Court] - the entire lottery tickets ceased to be stock-in-trade on the date of the draw because after the draw those tickets were unsaleable and have no value except waste paper Section 115BB is a special provision under the Act to tax the income by way of winnings from lotteries - the agreement was for the appointment of stockist on the payment of commission on the tickets sold by the assessee - The unsold tickets for which the information has not been given within the stipulated period was deemed to be sold by the State Government to the assessee - being the purchaser, the assessee gets right to participate in the draw through such tickets - Thus, prize won on such tickets amounts to income by way of winnings from lottery - The provision of Section 115BB of the Act is fully applicable thus, the order of the Tribunal is set aside - Decided decided Assessee. Disallowance of expenses Addition u/s 68 of the Act - Held that:- It is not clear from the order of the Tribunal that from which source the money has been brought and credited in the accounts of the creditors - If the amount has been credited in the creditors' accounts by debiting the account of the State Government, the source is fully proved and the addition of the balance amount of Rs.7,21,840/- cannot be added u/s 68 of the Act - from the assessment order, it appears that the assessee maintains mercantile system of the accounts - It is not clear whether the assessee has claimed deduction and same has been disallowed or since the amount was found deposited in credit side therefore added u/s 68 of the Act or added treating it as revenue receipt thus, the matter is remitted back to the Assessing Authority for the fresh adjudication Decided in favour of Assessee. Disallowance of amount Burden to prove - Held that:- There was no error in the order of the Tribunal - The burden lies upon the assessee to prove loss claimed by it - The assessee has claimed loss at Rs.21,13,848/-, out of which furnished details to the extent of Rs.19,22,168/-, therefore, disallowance of loss to the extent of Rs.1,91,680/- for want of evidence cannot be said to be unjustified Decided against Assessee.
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