COMMISSIONER OF INCOME TAX Vs. B C KOTHARI

JUDGEMENT

(1.) THE assessee in this reference has admittedly received a sum of Rs. 38, 079 when he won the jackpot at the horse race on February 27, 1972. THE amount was received by cheque and he made an entry in his account books to the effect that a cheque for Rs. 38, 079 was received from the Madras Race Club as."prize on hitting jackpot, vide ticket J. No. 26541 and Certificate No. 798 dated March 16, 1972" *. For the assessment year 1973-74 for which the previous year of the assessee ended on November 5, 1972, because the assessee had Deepavali account year, the Income-tax Officer included a sum of Rs. 37, 079, though the assessee claimed that this amount was exempt as the receipt fell within the financial year 1971-72.

(2.) THE figure Rs. 37, 079 was arrived at after allowing exemption for a sum of Rs. 1, 000 out of Rs. 38, 079 THE assessee went in appeal to the Appellate Assistant Commissioner who deleted the addition and accepted the case of the assessee that the winnings from the races accrued to the assessee on February 27, 1972, which fell in the financial year 1971-72 and no separate accounts had been kept or closed in respect of this source of income.THE Revenue challenged this order of the Appellate Assistant Commissioner in appeal before the Tribunal. Before the Tribunal, the case of the Revenue was that the assessee in his account books had shown income from his money-lending business and the receipt of Rs. 38, 079 was entered in the books of account and shown in the profit and loss account and the trial balance. Thus, according to the Revenue, the assessee had exercised his option with regard to the previous year ending Deepavali, 1972, in respect of that source of income. Reference is also made to the wealth-tax assessment of the assessee where this amount was shown as part of net wealth as on November 5, 1972THE Tribunal held that the receipt of the amount was on February 27, 1972, and it would be taxable only in the assessment year 1972-73.

(3.) THE Tribunal has found as a fact that the return of income for the assessment year 1973-74 did not show the amount of Rs. 38, 079 as income. On the other hand, the Tribunal has referred to the fact that there is a statement accompanying the return which indicated: "Horse race receipts Rs. 38, 079 (exempt)". THE learned counsel for the Revenue has, however, argued that the statement made by the Tribunal in paragraph 3 of its order that the return clearly indicated that the receipt of Rs. 38, 079 was exempt, the receipt being relevant for the assessment year 1972-73, should not be accepted by us as correct because, according to the learned counsel, the statement, the contents of which are reproduced by the Tribunal, itself merely states "Horse race receipts Rs. 38, 079 (exempt)". It is not possible for us to reject the observations made by the Tribunal as incorrect because there is no material to show that the statement is really incorrect.