COMMISSIONER OF INCOME TAX Vs. TILAK RAJ KALRA

JUDGEMENT

(1.) The revenue is in appeal against the order dated 16-12-2003, passed by the Income Tax Appellate Tribunal, Chandigarh Bench A (for brevity, the Tribunal), holding that the assessee-respondent was not liable to pay tax on the prize of 1 Kg. Gold won by him as it did not form part of his income within the meaning of clause (ix) of sub-section (24) of Section 2 of the Income-tax Act, 1961 (for brevity, the Act) in respect of Assessment Year 1996-97. The facts of the case as revealed in the order of the Tribunal are that the assessee-respondent subscribed Rs. 10,000/- to PPF which formed part of Small Savings Scheme encouraged by the Government of Punjab. The scheme formulated by the Government of Punjab provided incentive to encourage small savings to augment its resources. According to the scheme the Government issued lucky coupon on every investment of Rs. 5,000/-, which also covered investment in PPF. The assessee-respondent was also issued a lucky coupon which won the prize of 1 Kg. Gold. The Assessing Officer regarded the prize as income and found that it was worth Rs. 4,68,000/-. However, the assessee-respondent claimed exemption in respect of the value of gold arguing that it was actually an incentive and, therefore, it was not covered by the definition of expression income within the meaning of Section 2(24)(ix) of the Act, which deals with winning of 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.

(2.) The argument raised by the assessee-respondent was that the gold received by him did not amount to winning from lottery because for the purpose of lottery the assessee has to purchase a ticket and he loses the amount spent on purchase of lottery ticket. In case of contribution to small savings scheme a person obtains a return on his investment and there is no risk of loss on the amount contributed. However, the Assessing Officer held that the prize won by the assessee-respondent falls within the meaning of Section 2(24)(ix) of the Act and accordingly addition of Rs. 4,68,000/- in the income of the assessee-respondent in respect of Assessment Year 1996-97 was made.

(3.) The assessee-respondent filed an appeal before the Commissioner of Income Tax (Appeals) accepted the argument of the assessee and deleted the impugned addition. The view of the CIT (A) is discernible from the following para, which reads thus:-