1979 (1) TMI 92

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.... not casual and non-recurring ? 2. Whether the Tribunal was right in holding that the receipt of Rs. 6,69,152 arose from the business of the assessee?" In substance, the two questions referred to us constitute only one question, namely, " whether the sum of Rs. 6,69,152 received by the assessee as prizes of the Mysore State Lottery is taxable under the provisions of the Act or not ?" Briefly stated, the facts of the case are as follows: During the accounting year relevant to the assessment year 1971-72, the assessee, the Mysore Sales International Ltd., had entered into an agreement with the Department of Lottery of the State of Karnataka to act as the sole selling agent of the lottery tickets issued by the Department of Lottery....

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....ies of tickets sold." Under the above terms, the assessee undertook to sell not less than 75% of the total number of tickets released during each draw and in case 75% of the tickets released were not sold, whatever remained unsold out of the 75% of tickets should be deemed to have been purchased by the assessee itself. The assessee was bound to pay in any case the value of 75% of the total number of tickets. In return, the assessee was entitled to commission of 25% of the face value of the tickets sold or deemed to have been sold as required by cl. 3. The assessee was, however, entitled to an incentive payment of 2 1/2% of the face value of the tickets in addition to the commission payable as stated above when the entire number of ticket....

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....wed exemption in respect of the said amount and directed him to bring the said sum to tax. The assessee filed an appeal against the order of the Commissioner before the Tribunal which affirmed the order of the Commissioner. At the instance of the assessee, the above reference has been made to this court. The Tribunal found in the course of its order that the assessee had shown the sum of Rs. 12,53,186 paid by it in lieu of the tickets as business expenditure and that the assessee was able to realise in addition to the commission a sum of Rs. 6,69,152 on account of the said investment made by it. It, therefore, concluded that the sum of Rs. 6,69,152 was income earned in the normal course of business by the assessee. It is contended by Sri....