2025 (5) TMI 1296 - AT - Income Tax

Taxability of Price of lottery win - addition was made by the AO stating that this amount had to be taxed u/s 115BB(ii) at higher rate - contention of department is that the alleged amount has been won in lottery whereas the assessee has contended that it is in the nature of a gift - HELD THAT - Neither in the order of AO nor in the order of CIT(A) this fact has been adjudicated. In order to ascertain the taxability of an income the relevant facts needs to be verified. Set aside the order of ld. CIT(A) and remand the matter back to the file of Assessing Officer for necessary verification - Assessee appeal allowed for statistical purposes only.

Summary

The Appellate Tribunal (ITAT Ranchi) addressed an appeal concerning the taxability of Rs. 31,900/- allegedly won by the assessee. The Assessing Officer had treated this amount as lottery winnings, allowing only Rs. 5,000/- exemption and taxing the balance under Section 115BB(ii) of the Income Tax Act, 1961 at a higher rate, a view upheld by the Commissioner of Income Tax (Appeals). The assessee contended the amount was not lottery winnings but a gift-a bike won via a scratch card from TATA Teleservices Ltd.-and thus not taxable under Section 115BB(ii). The Tribunal noted that neither the Assessing Officer nor the CIT(A) adjudicated the factual nature of the amount (lottery vs. gift). Emphasizing the need for factual verification to determine taxability, the Tribunal set aside the CIT(A) order and remanded the matter for de novo consideration by the Assessing Officer, directing compliance with natural justice and granting the assessee a reasonable opportunity of hearing. The appeal was allowed for statistical purposes only.