2024 (10) TMI 744

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....-01-2023 in the matter of an assessment framed by Ld. Assessing Officer [AO] u/s. 143(3) on 24-12- 2019. The registry has noted delay of 7 days in the appeal which stand condoned. The primary issue that fall for our consideration is to determine the head of income under which prize winning from unsold lottery tickets would be assessable to tax. 2. This appeal was heard along with other appeals of assessee's sister concern M/s Pooja Marketing for AYs 2015-16 and 2016-17 in ITA Nos.958/Chny/2022 and ITA No.960/Chny/2022. It was admitted position that facts as well as issues in all the appeals are quite identical and our adjudication in any one appeal would equally apply to the other appeals also. The appeal in the case of M/s Pooja Marketi....

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....that the assessee has not treated the tickets as stock-in-trade since the assessee has not reflected any opening or closing stock in its financial statements. The same would mean that the assessee's intention was not to treat the winning as business receipts but as prize money from tickets which have remained unsold in the relevant lottery scheme. Therefore, such winning would be classified u/s 2(24)(ix) r.w.s. 56(2)(ib). It has also been submitted that Ld. CIT(A) as well as Mumbai Tribunal has not looked into all these aspects / facts. Accordingly, Ld. CIT(A) has prayed for restoring this issue back to the file of Ld. CIT(A). 7. The Ld. Sr. DR, in its written submissions, has stated that the assessee has returned back certain perc....

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....equal application in this year. At the same time, Ld. Sr. Counsel stated that the decision of Hon'ble High Court of Madras in the case of CIT vs. Dr. M.A.M. Ramaswamy (53 Taxmann.com 231) is distinguishable since the issue therein was whether the loss sustained in the business of owning and maintaining of race horses could be set-off against the income from betting of horse races. Thus, the issue was related to allowability of set-off of business loss against the income from betting and gambling. The assessee, in that case, had suffered loss on account of owning and maintaining horse races but had earned income from betting and gambling. The loss incurred on account of owning and maintaining of race horse is specifically prohibited....

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....lue of unsold tickets would become zero. The assessee, would, therefore, have no stock in its financial statements. Referring to various finding of Mumbai Tribunal, it has finally been submitted that the purchase price paid for lottery tickers was for onwards distribution of tickets to the stockiest. The purchase price could not be bifurcated between those tickets which have been sold to the stockiest and the unsold lottery tickets which have fetched prized money. The prize winnings are nothing but realization of unsold lottery tickets during the course of business. The Ld. Sr. Counsel thus opposed any interference in the impugned order. 9. After going through the order of Mumbai Tribunal in assessee's own case for AY 2014....