Lottery winnings can arise without a risk of loss when a bank deposit prize is awarded by chance.

A bank deposit prize scheme was treated as a lottery because the prize depended on a draw of lots and the governing element was chance. The absence of a stake capable of being lost did not change the essential character of the receipt. On that basis, the prize was regarded as winnings from a lottery and fell within the deduction provision under section 80TT of the Income-tax Act, 1961.

---

---

Issues: Whether the prize won by an assessee in a bank deposit prize scheme constituted winnings from a lottery eligible for deduction under section 80TT of the Income-tax Act, 1961.

Analysis: The scheme involved a prize being awarded by draw of lots to a depositor, and the absence of a stake capable of being lost did not alter the essential character of the receipt. The governing test was the presence of chance, and a lottery does not necessarily require that the participant must be exposed to a risk of loss. The receipt was therefore correctly treated as lottery winnings rather than as an amount outside the scope of section 80TT.

Conclusion: The receipt qualified as winnings from a lottery and the assessee was entitled to deduction under section 80TT.

Ratio Decidendi: A scheme amounts to a lottery if a participant purchases or obtains a chance of winning a prize by lot, and the existence of a risk of loss is not a necessary condition for lottery winnings.

---