TMI Blog1990 (11) TMI 99X X X X Extracts X X X X X X X X Extracts X X X X ..... an agent selling lottery tickets of lotteries conducted by the State of Karnataka (and perhaps others) for a commission. The rate of commission is 15 per cent. of the face value of each ticket sold. In the return filed for the assessment year 1978-79, the assessee disclosed a total income of Rs. 88,240 comprising the commission received from sale of lottery tickets as well as a sum of Rs. 1,00,000 received as bonus commission on account of the fact that one of the tickets sold by him in a particular draw of the lottery had won the first prize of Rs. 10,00,000. Before the Income-tax Officer, the assessee claimed the benefit of section 80TT of the Income-tax Act (hereinafter referred to as "the Act"). The assessment was concluded and the peti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed to deduction under section 80TT ?" "Income" is defined under clause (24) of section 2 of the Act. There is no dispute between the Revenue and the assessee-firm that the income disclosed from the sale of lottery tickets and the commission derived there from and the bonus commission given in that particular year both constitute taxable income irrespective of the source. The real question in dispute in the controversy lies is a narrow one and that is whether the income derived as bonus commission in the sum of Rs. 1,00,000 in the relevant assessment year constituted income falling fairly and squarely under sub clause (ix) of clause (24) of section 2 of the Act as it then was. Sub-clause (ix) reads as follows : "any winnings from lotteri ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Punjab and Haryana High Court, in the case of CIT v. Sanjiv Kumar [1980] 123 ITR 187. In the said case, the assessee, Sanjiv Kumar, was a participant in the activities of a chit fund company and was a regular contributor to the chits. The profits earned by the chit fund company by its transactions came to be awarded to the assessee by drawing lots, the mode, agreed upon by the members of the company to receive and distribute profits. Sanjiv Kumar, the assessee therein, therefore, claimed that as a receipt received by chance falling under the definition of lottery winning under section 80TT of the Income-tax Act. In dealing with the facts of that case, the learned judges went into the question of definition of "lottery", which was not a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s really has no substance because the firm purchased them as a sub-agent. In other words, the firm recouped what it had invested with his principal, Mysore Sales International Limited. Therefore, the prize amount has been wholly contributed by the purchasers of the tickets and not by the seller. Nor can it be said to be the winner because the ticket which won the prize amount of Rs. 10 lakhs was not purchased by the petitioner-assessee. It was the purchaser who took the chance and contributed to the prize amount with the hope and intention of winning the prize offered. The firm got a reward as an incentive bonus because it had sold a ticket which won the prize money. Such incentive bonus should be deemed to have been paid by the organiser o ..... X X X X Extracts X X X X X X X X Extracts X X X X
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