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2021 (12) TMI 511 - KERALA HIGH COURTTDS u/s 194H OR 194G - assessee purchases lottery tickets from the agencies referred to above and claim to sell the lottery tickets to the retailers - the assessee purchased lottery tickets from the State of Kerala and claims to have sold to the retail vendors - According to the assessee, there is no relationship of Principal and Agent between the assessee and the end sellers of lottery tickets to the general public and the retailers have become eligible for receiving their entitlement as successful agents' prize money/commission, etc. - HELD THAT:- The assessee acts as a post-office by receiving counterfoils of prize winning tickets sold by different retailers in the organisation of lottery business presented to the State government and the prize/incentive/bonus received from the government is transferred to retailers. In the circumstances of the case our attention has been drawn to the flow of counterfoils into the hands of assessee and presentation of counterfoils to government and receipt of incentive by assessee and subsequent transfer of incentive to retailers. The person responsible for making the payment is the government. Admittedly, the government after affecting TDS has paid the amount to the assessee towards prize incentive etc. The assessee has collected the amount and claims to have made over the incentive to the end retailers. Section 194G, as rightly held by the Commissioner of Income Tax and the Tribunal, is not attracted to the instant payment inasmuch as assessee is not under obligation to pay towards commission etc to any of these persons. The substantial questions of law framed by the Revenue are examined by keeping in perspective the confirming order of the Tribunal. And the findings of facts recorded by the Tribunal on which no exception is pointed out to the effect that Sections 194H and 194G are not attracted. It is definitely a case for consideration of substantial questions of law, had the Revenue established the basic ingredients required for attracting any one of the sections to the controversy covered by the appeal. We are of the view that the assessee being a wholesale dealer/Stockist of lottery has purchased from the government and sold to the retailers. It is accepted as a purchase from the organizing agency of lottery and sale to retailers. The amount covered is incentive payable by the organizing department to the agent and none of the ingredients required for adding the disputed amount is established. The questions, in our view, do not arise for consideration particularly having regard to the findings appreciated by the CIT (Appeals) and the Tribunal and accordingly the questions are answered in favour of the assessee and against the Revenue.
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