Law:

Section:

Section 2(24)(ix) [as amended by the Finance Act, 1972] of the Income-tax Act, 1961 - Income - Chargeable as - Whether winnings of a resident of India from lotteries conducted in a foreign country is also an income within the meaning of section 2(24)(ix) - Held, yes Section 5(1)(c) of the Income-tax Act, 1961 - Income - Accrual of - Whether (winning by resident from lotteries conducted in a foreign country has to be taken as income 'accrued to assessee-resident in view of section 5(1)(c) - Held, yes Section 10(3) [as it stood after 1-4-1972] of the Income-tax Act, 1961 - Exemption - Casual receipts - Assessee received a lottery prize during previous year relevant to "assessment year 1973-74 on a ticket of Sikkim Government lottery and claimed that notwithstanding amendment of section 10(3) with effect from 1-4-1972 the impugned prize was exempt under section 10(3) as a casual and non-recurring receipt since sections 194B and 276B could not be applied to a foreign Government and as such, such prize could not be treated as income - Whether assessee's claim justified - Held, no Facts During the previous year relevant to the assessment year 1973-74 the assessee won a prize of certain amount on a lottery ticket of the Sikkim Government (then a foreign country). The assessee claimed that the said amount was receipt of a casual and non-recurring nature and, therefore, exempt from tax. The ITO, however, brought the said amount to tax on the ground that the assessee being a resident of India, in view of section 5, the income accruing or arising outside India was also taxable in his hands and as the definitions of income contained in section 2(24)(ix) included winnings from lottery, the impugned amount was liable to be taxed under section 56 as income from other sources. On appeal, the Tribunal, however, held (i) that in spite of insertion of sub-clause (ix) to section 2(24) and clause (ix) to section 56(2) and the substitution of section 10(3), with effect from 1-4-1972, the winnings from lotteries in a foreign country would retain their character as receipts of a casual and non-recurring nature, (ii) that the fact that the aforesaid sections would operate in respect of…

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