PRAMILA BAKORE Vs. COMMISSIONER OF INCOME-TAX

JUDGEMENT

(1.) THIS is an income-tax reference made at the instance of the assessee by the Tribunal under Section 256 (1) of the Income-tax Act, 1961, in R. A. No. 108/ind/91 which arises out of an appellate order dated May 5, 1991, passed by the Tribunal in I. T. A. No. 701/ind/85 to answer the following question of law : Whether, on the facts and in the circumstances of the case, the Appellate Tribunal is right in holding that the deduction under Section 80tt is admissible on the net amount of prize money of Rs. 10,80,000 and not on the gross lottery prize of Rs. 12 lakhs as per the provisions of Section 80tt read with Section 80b (5) of the Income-tax Act which were in force in the assessment year 1978-79 ?

(2.) THE late M. P. Bakore was the husband of the assessee. He won the first prize of lottery of M. P. State of Rs. 12 lakhs. This amount was then assessed to tax in the hands of the assessee's husband and on his death in the hands of the assessee as his legal representative.

(3.) IN terms of the Lottery Rules, 10 per cent, commission was paid to the agent amounting to Rs. 1,20,000 and tax was deducted at source at Rs. 3,56,400. In this way, a sum of Rs. 7,23,600 was paid to the assessee, i. e. , to her husband.