COMMISSIONER OF INCOME TAX Vs. RASHMI KAMDAR

JUDGEMENT

(1.) PURSUANT to a direction of this Court, at the instance of the Revenue, the Tribunal, Madras "D" Bench, has referred to this Court the question : "Whether, on the facts and in the circumstances of the case, the Tribunal's view that the sum of Rs. 42,383 being the income from race winnings cannot be considered in the previous year ended on 30th June, 1972, relevant for the asst. yr. 1973-74 is valid and sustainable in law ?"

(2.) THE assessee had adopted the year ended on 30th June, 1972. He filed the return of income for the asst. yr. 1973-74 and indicated that the relevant previous year ended on 30th June, 1972. While submitting the return, showing a net income of Rs. 1,600 only in Part III thereof, he included the above sum of Rs. 42,383 as income from race winnings, viz., jackpot on 28th Feb., 1972. According to him, it constituted a source of income assessable under the head "Other sources" and pertained to the previous year ended 31st March, 1972, since, according to him, the winnings from races became assessable to tax for the first time only in the asst. yr. 1973-74, the assessee was not liable to tax on the above amount. THE assessee maintained a cash book and ledger for the period from 1st July, 1971, to 30th June, 1972, and the race account in the ledger showed the cash investment of Rs. 4,302 and the jackpot winnings. THE race account surplus of Rs. 38,063 was shown as a credit in the assessee's capital account on 12th March, 1972. THE ITO accepted the case of the assessee and assessed him accordingly on the net income of Rs. 1,600 only. THE CIT, however, exercised his revisional power and took the view that the previous year would be the year ended on 30th June, 1972, and therefore, the race winnings would be taxable. THE assessee appealed.

(3.) THIS Court had the occasion to deal with a somewhat similar situation in the case of CIT vs. B. C. Kothari (1986) 160 ITR 27 (Mad).