Law:

Section:

Wealth tax--Net wealth---Lottery prize---Dispute regarding ownership of Lottery. Prize pending before High Court --Assessee allowed to draw one-half of amount by giving Bank guarantee pending litigation on condition that amount to be refunded if he fails in litigation---Prize money did not accrue in relevant year---Not includible. The assessee had made a claim to a Lottery Prize, but it was disputed by one A who also claimed to be entitled to that prize. The litigation which commenced at the sub-Court at Vellore ended in favour of the assessee at the level of that Court. An appeal having been preferred by A, the matter was taken to the High Court and by an interim order made by the High Court, the assessee was allowed to withdraw. one-half of the amount against a bank guarantee or. condition that the assessee in the event of failing before the High Court would be liable to refund the amount drawn and in case' the assessee failed' to do so, the bank would be liable to make the payment. On a reference of the question whether the value of the lottery prize was includible in the assessee's net wealth: Held, that the prize amount had not accrued to the assessee in the relevant year. CIT v. Hindustan Housing and Land Development Trust Ltd. (1986) 161 ITR 524 (SC) applied. JUDGMENT R. JAYASIMHA BABU, J.---The question referred to us at the instance of the Revenue, relating to the assessment year 1977-78, arising out of the provisions of the Wealth Tax Act is as to "whether, on the facts and in the circumstances of the case, the sum of Rs. 22,68,000 is includible in the net wealth of the assessee as an asset belonging to him as on the valuation date March 31, 1977, relevant for the assessment year 1977-78 under the Wealth Tax Act, 1957"? The amount referred to in the question is the value of the lottery prize, to which the assessee had made a claim, but was disputed by one…

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