9911796707
TMI Blog2012 (8) TMI 192X X X X Extracts X X X X X X X X Extracts X X X X ..... d by the Assessing Officer. 2. The assessment year in question is 2006-07; the respondent assessee firm is a sole selling agent of lotteries for certain stockists of State lotteries, and has arrangements with sub-agents, under which the latter (i.e. the sub-agents) operate terminals at kiosks and sell lottery tickets. The AO noticed that the balance sheet filed by the assessee with the return of income for the assessment year in question reflected a credit entry of Rs. 1,42,09,820/-, with a remark "Prize Winning Tickets ("PWT") payable". The assessee, upon being queried, responded stating that it had already received PWT worth Rs. 1,36,77,950 from selling agents during the year and this amount had been reflected in the balance sheet ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as and when the purchasers make the payment at the kiosks and that therefore, the whole of the tickets were not released to the assessee. On this reasoning, the AO held that the liability of Rs.1,42,12,620/- was artificial and was made to mislead the assesse‟s taxable profit. The amount was added back to the total income of the assessee. The Appellate Commissioner, upon the assesse‟s grievance, deleted the inclusion. The revenue‟s appeal to the Tribunal was rejected by the impugned order. 4. It is argued by Counsel for the revenue that the Appellate Commissioner and the ITAT fell into error of law in deleting the inclusion (of Rs. 1,42,12,620/- by the AO). It is urged that the finding of the AO that the liability was an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... putedly, as rightly observed by the CIT(A), the PWT payable in this case is accounted for in the accounts of the assessee, on a day-to-day basis. Rather than the assessee, it is the sub-agent who is responsible for selling the lottery and to make the payment for Prize Winning Tickets and also to account for in the P&L A/c. It is the State Lotteries Department of the Government, which ultimately accounts for the amount of PWT payable. The sub-agent makes the entry with respect to PWT vis-a-vis the assessee, who is the sole selling agent, in such a manner. Pertinently, the assessee is at no stage responsible for payment of PWT. So far as regards the amount in question, the entry for PWT payable as on 31.3.06 was matched to the extent of Rs.1, ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
