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BAHADURSINGH T. WAGHELA Versus WEALTH-TAX OFFICER

2016 (8) TMI 851 - GUJARAT HIGH COURT

Levy of tax on the whole of the lottery income - other beneficiaries of Neha Trust have paid taxes on their respective share of income from the said lottery prize in their individual capacity - Held that:- In our view, not accepting the trust deed and trust account, the authorities have seriously committed an error. The amount of ticket is from the trust account and the amount of prize is distributed amongst beneficiaries. Even T.D.S is shown in the balance sheet of the trust account. The learne .....

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g that the assessee is liable to pay tax. In the facts and circumstances of the case, we hold that the amount was received by the trust and not by the individual in his individual capacity. In that view of the matter, we answer the question in favour of the assessee and against the revenue. However, we make it clear that the amount of TDS and amount of tax collected from the appellant may be refunded to the appellant and lottery amount TDS may be refunded to Neha Trust. - TAX APPEAL NO. 88 of 20 .....

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er of the Commissioner (Appeals) and the lottery prize was won in the individual capacity of the assessee and not by the Trust. 2. These appeals were admitted by this court for consideration of the following substantial question of law: Tax Appeal No. 88 of 2002: Whether in the facts and circumstances of the case, the ITAT has not erred in law in holding that the appellant is liable to pay wealth tax on the whole of the lottery income in spite of the fact that the other beneficiaries of the Neha .....

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case, the ITAT was right in law in giving a finding that the appellant was liable to pay tax on an assumed income of ₹ 1,66,949/- at 12% on the balance of the lottery prize? 3. The facts of the case are that the assessee is one of the trustees of Neha Trust which is registered on 21.12.1981. The assessee purchased a lottery ticket from the trust fund. The draw of lottery was made on 14.7.1983 which was published on 15.7.1983. It has come on record that the assessee made an application to t .....

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roclaimed by the State or Central Government to the extent that it does not exceed ₹ 200/- in the year. 3.1 It has come on record that the amount which has been received in the year 1984-85 during the financial year 1983-84 was distributed and T.D.S. amount was also shown in the trust amount. Learned counsel for the appellant has also shown the expenses of the lottery ticket in the trust account and the individual persons who have paid tax is shown on the last page of the paper book. Learn .....

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he amount was withdrawn from the trust amount and the trust which is not registered and merely a trust deed is executed, the amount which has been shown withdrawn in the books of account cannot be accepted. Individual Bahadursingh T. Waghela has withdrawn the amount. He was the buyer of the ticket and he will be entitled to receive it and is liable to pay tax. He has relied on the decision of this court in the case of Tuticorin Alkali Chemicals and Fertilizers Ltd. v. Commissioner of Income-tax .....

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ith law. Income is something which flows from the property. Something received in place of property will be capital receipt. The amount of interest received by the company flows from its investments and is its income and is clearly taxable even though the interest amount is earned by utilising borrowed capital. 5. We have heard learned counsel for the parties. The question which is posed for our consideration is whether the appellant is liable to pay income tax on the whole of the lottery income .....

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