TMI Blog2006 (2) TMI 500X X X X Extracts X X X X X X X X Extracts X X X X ..... ny has conducted a Tata Sumo Lucky Draw and in respect of which 3,300 coupons costing Rs. 200 each was sold and the scheme was that winner of the lucky draw shall be given a Tata Sumo Vehicle costing Rs. 5,47,618. Assessing Officer noticing that assessee has not deducted any TDS as per provisions of section 194B and this being violative of the provisions of section 201 read with section 201(1A), Assessing Officer treated the assessee as assessee in default and accordingly raised a demand of Rs. 1,72,266 on the assessee. 3. The matter was carried before the learned CIT(A). Learned CIT(A) by recording a categorical finding that assessee was carrying a scheme of lottery and referring to the Circular No. 264 issued by CBDT, uphold the act ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ntative also referred to the Circular of the Board and argued that as per wording of the Board s Circular, scheme of the assessee does not fall into the category where provisions of section 194B can be applied. Learned Authorised Representative also argued that as per the scheme of section 194B, no other words or phrases or meaning should be imposed from the outside so as to bring business promotion of the assessee in the ambit of section 194B and for this learned Authorised Representative relied on the judgment of the Mumbai Special Bench in the case of B. Sorabji v. ITO [2005] 95 ITD 540 . 5. On the other hand learned Departmental Representative argued that as per the clear provision of section 194B assessee was conducting a schem ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ection 194B and Circular of CBDT No. 264 as under : Section 194B "The person responsible for paying to any person any income by way of winnings from any lottery or crossword puzzle [or card game and other game of any sort] in an amount exceeding [five thousand rupees] shall at the time of payment thereof, deduct income tax thereon at the rates in force : Provided that in case where the winnings are wholly in kind or partly in cash and partly in kind but the part in cash is not sufficient to meet the liability of deduction of tax in respect of whole of the winnings, the person responsible for paying shall, before realizing the winnings, ensure that tax has been paid in respect of the winnings" CBDT Circular No. 264 "[1.] Deducti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Therefore, the plain language of the section and the circular reflected above, clearly bestows the responsibility on the person to deduct the tax at source who conduct any scheme in the name of the lottery or drawing by lot by giving a person a chance to win by participating in the scheme. Argument of the learned Authorised Representative that provisions of section 194B is for those cases where element of gambling is concerned and business promotion scheme launched by the assessee as such are not covered in the provisions of section 194B, does not follow from the plain language of section 194B. It should be appreciated that section 194B is a part of Chapter XVI of the I.T. Act which provide various provisions of deduction of tax at source f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ize decided by the chance. A question arose in the case of CIT v. Dy. Director of Small Savings [2004] 266 ITR 27 (Mad.), where a scheme operated by Government for distributions of prize in kind by giving free chance in the order to promote savings scheme and it was so held in this case that there was free chance given to the investors and the scheme was held not to be a lottery and there was no liability of the tax at source. A further question regarding a scheme in the name of Lok Sabha Poll Forecast and World Cup Football Forecast Context arose in the case of ITO v. Malayala Manorama Co. Ltd. (Cochin) Ltd. and it was so held that since a skill is an integral part of the scheme finding out the prize winners from amongst the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is also misplaced as it has been cited totally out of context. In the case of CIT v. Sun Engg. Works (P.) Ltd. [1992] 198 ITR 297 , Hon ble Supreme Court has held as under : "It is neither desirable nor permissible to pick out a word or a sentence from the judgment of the Supreme Court divorced from the context of the question under consideration and treat it to be the complete law declared by the court. The judgment must be read as a whole and the observation of the judgment have to be considered in the light of the questions, which were before the court. A decision of the Supreme Court takes its colour from the questions involved in the case in which it is rendered and while applying the decision to a later case, court must carefu ..... X X X X Extracts X X X X X X X X Extracts X X X X
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