Law: Income Tax Act, 1961

Section: 256,256(2)

Income-tax----Income from lottery ---Encashment of lottery ticket by illegal exchange-­Assessed as income from other sources---Reference---Questions as framed did not arise for consideration--.-Indian Income Tax Act, 1961 S.256(2). The assessee claimed to have purchased a lottery ticket and won the second prize of Rs.11,00,000. He claimed to have initially deposited the ticket with the State Bank of India and took it back subsequently and encashed it through lottery agents for a sum of Rs.6,23,000. The assessee claimed that he had taken Rs.1,23,000 as his share and the balance amount was given equally to his two sons and two daughters-in-law as he claimed to have purchased the ticket jointly with them. The said amount of Rs.6,23,000 was assessed as income of the assessee treating it as income from other sources in view of his sworn statement that he alone purchased the ticket. It was also ascertained from the Joint Director (Lotteries) that the said ticket had been submitted by B of Bombay. The Commissioner of Income-tax (Appeals) and the Tribunal confirmed the assessment. The reference application filed by the assessee was dismissed. Oil an application under section 256(2) of the Income Tax Act, 1961, requiring a direction to refer the following question of law: (1) Whether, on the facts and in the circumstances of the case, the Tribunal was right in holding that the entire lottery receipt was to be assessed only in the hands of the assessee; (2) Whether, on the facts and in the circumstances of the case, the Tribunal was justified in arriving at the conclusion that the onus always lay on the person who alleged the transaction in spite of the fact that the assessee discharged his obligation as contemplated under the statute by bringing all evidence at his command to the Department: Held, rejecting the reference application, that the prize winning ticket had not been presented and encashed by the assessee. The fact was that one B of Bombay presented the ticket and encashed the amount. Therefore, the amount of Rs.6,23,000 allegedly received by the assessee could have been only by the illegal change and sale of the lottery ticket. That being so, the tax…

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