TaxTMI 
TaxTMI 
2009 (2) TMI 938
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....owards. Sikkim Income Tax from the prize money and paid the appellant only the balance amount. In the Income Tax assessment completed for the assessment year 2003-04 the Income Tax Officer brought to tax the entire prize money of Rs. 4,55,57,980 at the rate of 30 per cent under Section 115BB of the Income Tax Act, 1961. Even though assessee claimed credit of tax deduction at source by the Sikkim Government the same was rejected by the officer. The assessee filed appeal against the assessment before the Commissioner of Income Tax (Appeals) who allowed the appeal by directing the officer to give credit for the Sikkim Income Tax deducted at source by the Government of Sikkim. The revenue filed appeal against this order before the Income Tax Ap....
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....d at source having regard to the fact that tax deducted at source by the Sikkim authorities did not accrue to and was not received by the appellant? The first question is whether winnings from lottery from Sikkim can be assessed as income under Section 2(24)(ix) of the Income Tax Act. The Income Tax Act provides a specific charging Section 115BB provides tax at 30 per cent on income from lotteries. The assessee is an individual residing in India and Sikkim being a State in India, we see no reason why the income earned by the assessee in the form of prize money from lotteries is not assessable under the Act. Even though assessee has claimed that the lottery income was subjected to tax in Sikkim, we are unable to accept the same because th....
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....of tax by or on behalf of the person whose income was subjected to deduction. It is clear from the certificate issued by the Lotteries Director that he has not deducted Income Tax under Section 194B of the Income Tax Act on the payment of lottery prize money to the assessee and admittedly he has not paid the amount so deducted to the Central Government. He has clearly stated in the certificate that what is deducted is Sikkim Income Tax. Therefore, the Tribunal rightly reversed the order of the Commissioner (Appeals) and held that assessee is not entitled to any credit of tax based on the certificate issued by the Lotteries Director under Section 199 of the Income Tax Act. Consequently we uphold the order of the Tribunal in this regard as we....
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....ual income received by the assessee which in this case is excluding the Income Tax deducted by the Lotteries Director in the State of Sikkim, no matter such deduction may be unauthorised. 6. Even though standing Counsel for the department contended that if the Director of Lottery has made unauthorised deduction it is for the assessee to pursue his remedy elsewhere, we do not think that the assessee can be expected to recover this amount through the litigation against the State Government. On the other hand we feel that if the State Government is recovering Income Tax and retains it for itself payment to the Central Government, it is for the Central Government to take necessary steps to ensure that constitutional provisions are not violat....