TMI Blog2016 (1) TMI 638X X X X Extracts X X X X X X X X Extracts X X X X ..... racing. The term 'any other similar game' found in Explanation (ii) to section 2(24)(ix) has to be held as inclusive definition and has to be read ejusdem generis and as such, activity of owning and maintaining horses cannot by any stretch of imagination fall in the definition of 'card game or other game of any sort' found in section 194B. - Decided in favour of assessee - I.T.A.Nos.646, 647, 648, 649, 650, 651, 652, 653, 654, 655, 656 and 657/Mds/2015 - - - Dated:- 28-10-2015 - SHRI N.R.S. GANESAN, JUDICIAL MEMBER AND SHRI CHANDRA POOJARI, ACCOUNTANT MEMBER For The Appellant : Dr. Anitha Sumanth, Advocate For The Respondent : Dr. Milind Madhukar Bhusari, IRS, CIT ORDER PER CHANDRA POOJARI, ACCOUNTANT MEMBER The ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... everages Pvt.Ltd. vs CIT (2007) 293 ITR 226 applies on all fours. 3. The facts of the case are that the assessee is a company with limited Liability registered u/s 25 of the Companies Act. The assessee has been conducting Horse Races in Chennai and the hill station of Ootacamund and collecting the entry fee and betting money from punters and keeps certain portion of the betting amount collected from punters and the same is utilized for payment of stake money to horse owners, administrative cost and other expenses The TDS inspection was carried out in the office premises of the assessee on 14.02.2013. It was found that tax was not deducted on payments of stake money disbursed among the winning horse owners. According to the AO, horse ra ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... en two or more clauses appear to deal with the same subject, the one with the latest amendment prevails. This is without prejudice to hold that the activity of breeding and owning differs from the activity of racing and participating in a race for stake money. The activity of participating in the race itself comes under the ambit of the game. The activity of facing for the purpose of stake money could make such stake money assume the character of wining from the games. The Assessing Officer also relied on explanation 2 to section 2(24)(ix) of the Act to hold 'that the stake money is squarely covered by the definition of games and other games of any sort . Thus, the AO rejected the contention of the assessee that it is not liable to ded ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rities has applied the provisions of section 194B to the payments made to horse owners as stake money on the ground that by insertion of words or card game and other game of any sort w.e.f. 1.6.2001, the horse racing income comes under the ambit of other game of any sort , we find that this issue had arisen in the case of Bangalore Turf Club Ltd. Vs. Union of India and others (2014) 52 taxmann.com 290 and the Karnataka High Court in the writ petition Nos. 6565 to 6568, 6651-6652, 6674, 18696 18697 of 2013 (T-IT) filed by the Bangalore Turf Club has dealt with this issue at length and has held that the amended provision of section 194B do not apply to horse racing. The relevant portion of the judgment of the High Court is reproduced h ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rse owners. 61. Explanation (ii) to sub-section (ix) of section 24 came to be inserted by Finance Act, 2001. It is an inclusive definition. The term or any other similar game found in Explanation (ii) will have to be ejusdem generis and so also the term any other similar game found in section 2(24)(ix) of the Act. On advent of game shows involving prize money being telecast through electronic media and said prize money having not found its place in the definition clause of Income under the Income-tax Act, 1961, Legislature introduced Explanations (i) and (ii) to sub-clause (ix) of sub-section (24) of section 2 so as to include such prize money also under definition of income , since in those events people would compete with each othe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... other and win prizes in any game show or entertainment programme on television or electronic media and games similar to it. Hence, stake money which is paid to race horse owners on their horses being placed 1, 2 or 3 onwards in a horse race cannot form the genus of the words found inExplanation II to section 2(24)(ix) nor it can be held that such winnings would fall within the words and other game of any sort found in section 194B. 63. Hence, this Court is of the considered view that amendment brought about by Finance Act of 2001 to Section 2(24) and 194B would have no bearing on the income earned from 'owning and maintaining horses'. In other words, the term 'any other similar game' found in Explanation (ii) to secti ..... X X X X Extracts X X X X X X X X Extracts X X X X
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