TMI Blog1980 (7) TMI 91X X X X Extracts X X X X X X X X Extracts X X X X ..... s to the assessment for the assessment year 1971-72, previous year being the one ended March 31, 1971. The assessee is partner of a firm which is engaged in the business of book-makers in connection with horse racing. He returned an income of Rs. 38,197 being his share of income from the said firm. In Part IV of his return, he had shown a sum of Rs. 3,27,111 for the relevant year as representing net race winnings on the jackpot tickets. He claimed exemption in regard to this amount on the ground that it was a casual and non-recurring receipt coming within the purview of s. 10(3) of the I.T. Act, 1961 (hereinafter referred to as " the Act "). The ITO accepted the claim of the assessee and concluded the assessment. The Commissioner, howeve ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the view expressed by the judicial Member and accordingly, by a majority decision, the contention of the assessee was accepted. At the instance of the Commissioner, the question has been referred to this court. By an amendment made by the Finance Act, 1972, the definition of "income " was amended by insertion of sub-cl. (ix) under s. 2(24) of the Act, which is as follows: " (ix) any winnings from lotteries, crossword puzzles, races including horse races, card games and other games of any sort or from gambling or betting of any form or nature whatsoever." As a sequel to this, an amendment was introduced to s. 10(3)(ii) of the Act also. Earlier to the amendment, the sub-section opened with the words " any receipts which are of a cas ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... over Rs 5,000 was entitled to be deducted in the computation of total income of the assessee. These provisions, prima facie, indicate that prior to the specific amendment made in the definition of " income ", these categories of receipts were not liable to income-tax. The judicial Member held that the act of the assessee in buying the jackpot tickets had nothing to do with his activity as a book-maker in the firm and that the buying of jackpot tickets was not incidental to the carrying on of his business as a book-maker. He was also of the opinion that the receipts were casual and non-recurring and that they could not be said to be receipts arising from business or the exercise of a profession or occupation. He expressed himself thus : t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... a case of the assessee being smiled upon by dame fortune and that his knowledge and experience as a book-maker were not the contributory cause for his success. He held that the mere fact that the assessee had indulged in betting in jackpot pool more than once could not convert the activity into a vocation and that betting by itself was not a business or profession. He also observed that the activities of the assesses could not be termed as an organised commercial activity amounting to vocation or occupation. It is clear from the facts on record that buying of the jackpot tickets and the winnings in respect of some of them was entirely personal to the assessee. The business of a book-maker is to accept bets from punters and set different ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... et is merely an irrational agreement that one person should pay another person something on the happening of an event. A agrees to pay B something if C's horse runs quicker than D's or if a coin comes one side up rather than the other side up. There is no relevance at all between the event and the acquisition of property. The event does not really produce it at all. It rests, as I say, on a mere irrational agreement." The receipts were inconsequence of the bets offered by the assessee and cannot be placed on any other footing as being receipts arising out of any business or occupation. The requirements of s. 10(3) of the Act were clearly satisfied by the assesses and the receipts were not taxable. Accordingly, the question is answered ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
