TaxTMI 
TaxTMI 
2016 (1) TMI 638
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....grounds. 1. The Order of the Commissioner of Income Tax (Appeals) confirming the order levying penalty u/s 201 (1) & (1A) of the Act on stake money form horse racings is erroneous, contrary to law and facts. The same is liable to be reversed in full. 2. The Authorities erred in not noting that the proceedings were bad in law and barred by limitation. 3. The Commissioner of Income Tax (Appeals) errs in applying the provision of Sec.194 B of the Act in contradiction to Sec.194 BB that specifically deals with horse racing . 4. The authorities ought to have noted that the CBDT Circular No.240 dated 17.5.1978 has clarified the position with regard to tax deducted at source from income by way of winnings on horse racing and erred in no....
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....rizes paid to horse owners u/s 194B of the Act pertaining to FYs 2006-07 to 2011-12. In response, the assessee stated that the stake money is not liable to TDS u/s 194BB as per Board's circular No.240 of 17.05.1978. The assessee has also relied on the decision of Supreme Court in the case of Hindustan Coca Cola Beverage (P) Limited vs CIT (2007) 293 ITR 226 wherein it was held that if the payee has already paid tax on the income, recovery of tax cannot be made once again from the tax deductor. The assessee further argued that the stake money will not be covered by sec.194B of the Act also. Not convinced with the reply of the assessee, the AO was of the view that the assessee's case was covered by sec. 194B of the Act in view of the ....
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.... its claim. The AO further rejected the contention of the assessee that the reopening is not valid for financial years 2007 to 08 to 2009-10 after the expiry of two years from the end of. The financial year in which the statement filed as referred to sec.200 of the Act for the reason that the deductor has not filed the return in respect of stake money. The AO held that the stake money from horse races is in the nature of prize money received on horse race by the owner thereof on account of the fact that the horse winnings the race or stands in second or in any lower position. Accordinq to Assessing Officer the stake money is liable for TDS u/s 194B of the Act and by not deducting tax, the assessee is to be treated as the assessee in default....
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....ity of owning and maintaining horses cannot by any stretch of interpretation be held that it would fall within the definition of 'and other game of any sort'. 59. Thus, harmonious reading of the statutory provisions would indicate that from the year 1972 itself, the term 'other' game of any sort' was taxable under the head 'income from other sources' and TDS was not attracted on such income. 60. Sub-sections (1) and (2) of section 74A which was introduced by Finance Act, 1972, with effect from 01.04.1972 was omitted by Finance Act, 1986 with effect from 01.04.1987. However, subsection (3) to section 74A was inserted by Finance Act, 1974, with effect from 01.04.1975 indicating the distinction between 'winnings' ....
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....i) and (ii) which is once again extracted herein below: "Winnings from lotteries, cross-word puzzles etc., are currently taxed at 40%. As the marginal personal income-tax rates have now stabilised at 30%, this income will also now be taxed at 30%. Television game shows are very popular these days. I wish the winners well. At the same time, I propose that income-tax at the rate of 30% will be deducted at source from the winnings of these and all similar game shows." Ejusdem generis, principle of construction would mean same kind or nature, whereby wide words associated in the text with more limited words are taken to be restricted by implication to matters of the same limited character. For this principle to apply there should be sufficient ....