TMI Blog1998 (4) TMI 74X X X X Extracts X X X X X X X X Extracts X X X X ..... others had purchased 101 lottery tickets of the Pondicherry Raffle Scheme. In the draw held on July 11, 1981, one of the tickets purchased by them won the prize of Rs. 10,00,000. All these individuals separately filed returns of income claiming that there was an agreement between them on July 7, 1981, according to which the prize was to be shared in the prescribed ratio. The Income-tax Officer, however, held that they were to be assessed collectively as a body of individuals as there was unity of interest among them in purchasing the tickets collectively in the hope that one of those tickets would fetch a prize which would be shared by all. That view of the Income-tax Officer was reversed in appeal by the Commissioner of Income-tax (Appeal ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s up to the time when the prize money is received if one of those tickets happens to be the prize winning ticket, and the amount so received is the result of the joint venture of all the persons who collectively purchased the lottery tickets and, therefore, it is those persons collectively as a body of individuals who are liable to be assessed under the Income-tax Act. The court pointed out that the two conditions for assessing the income under the status of an association of persons are that there must be a joint venture and that the object of joint venture must be to earn income. Both the conditions have been satisfied as the object of the venture was to earn income and the venture was not individual but joint. The law laid down in that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the "right person". The view of the Tribunal that there was no joint venture and the view of the Commissioner that the prize money received in a lottery being a windfall, any organised activity in purchasing the ticket would not result in making the body of persons who organised that venture an assessable entity cannot be upheld. Though the Tribunal did not record a finding that the assessment on the body of individuals was unwarranted because some of the members had been assessed individually, implicitly the Tribunal approved the view of the Commissioner who had accepted all the arguments advanced for the assessee before him, one such argument being that the individual assessment having been made the Revenue could not proceed to disreg ..... X X X X Extracts X X X X X X X X Extracts X X X X
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