Commissioner of Income-tax Vs. A. Abdul Jaffar and anr. - Court Judgment

SooperKanoon Citationsooperkanoon.com/814194
SubjectDirect Taxation
CourtChennai High Court
Decided OnFeb-14-2001
Case NumberTax Case No. 901 of 1988 (Reference No. 688 of 1988)
JudgeR. Jayasimha Babu and ;K. Gnanaprakasam, JJ.
Reported in[2001]250ITR736(Mad)
ActsIncome-tax Act, 1961
AppellantCommissioner of Income-tax
RespondentA. Abdul Jaffar and anr.
Advocates:Chitra Venkataraman, Adv.
Excerpt:
- k. gnanaprakasam, j. 1. at the instance of the revenue, the following question has been referred to us :'whether, on the facts and in the circumstances of the case, an assessment in the status of body of individuals was correct ?'2. the brief facts are that one abdul jaffar and madasamy jointly purchased a lottery ticket of rajasthan for the draw scheduled to be held on october 12, 1983. the ticket won a prize of rs. 2 lakhs and also deducting commission of rs. 20,000 and income-tax of rs. 45,000, the balance was received through the bank of tamil nadu, tenkasi, and it was divided between them. each of them filed a return of their own income showing the share of rs. 90,000 each. but the income-tax officer made an assessment in the status of body of individuals on both of them for a total income of rs. 1,80,000 as the income from lottery. but, however, on appeal, the order of the income-tax officer was set aside on the ground that these two persons are only co-owners of the prize money and did not constitute a body of individuals. on further appeal, the order of the appellate assistant commissioner was confirmed by the appellate tribunal. in the said circumstances only the above question has been referred to us.3. a similar question came up for consideration of this court in the case of cit v. a. u. chandrasekharan : [1998]229itr406(mad) , wherein this court, after considering various aspects of the case, came to the conclusion that if persons enter into an agreement to purchase a lottery ticket with a view to earn income, it is a joint venture. the two conditions for assessing the income under the status of an association of persons are : (1) there must be joint venture and (2) that the object of the joint venture is to earn income. if both the conditions are satisfied, the income-tax officer cannot tax theincome in the status of an individual. it has got to be assessed under the head 'association of persons' and the question answered in favour of the revenue.4. as the facts in that case are similar to the one referred to us we also hold that the question has to be answered in favour of the revenue and against the assessee.
Judgment:

K. Gnanaprakasam, J.

1. At the instance of the Revenue, the following question has been referred to us :

'Whether, on the facts and in the circumstances of the case, an assessment in the status of body of individuals was correct ?'

2. The brief facts are that one Abdul Jaffar and Madasamy jointly purchased a lottery ticket of Rajasthan for the draw scheduled to be held on October 12, 1983. The ticket won a prize of Rs. 2 lakhs and also deducting commission of Rs. 20,000 and income-tax of Rs. 45,000, the balance was received through the Bank of Tamil Nadu, Tenkasi, and it was divided between them. Each of them filed a return of their own income showing the share of Rs. 90,000 each. But the Income-tax Officer made an assessment in the status of body of individuals on both of them for a total income of Rs. 1,80,000 as the income from lottery. But, however, on appeal, the order of the Income-tax Officer was set aside on the ground that these two persons are only co-owners of the prize money and did not constitute a body of individuals. On further appeal, the order of the Appellate Assistant Commissioner was confirmed by the Appellate Tribunal. In the said circumstances only the above question has been referred to us.

3. A similar question came up for consideration of this court in the case of CIT v. A. U. Chandrasekharan : [1998]229ITR406(Mad) , wherein this court, after considering various aspects of the case, came to the conclusion that if persons enter into an agreement to purchase a lottery ticket with a view to earn income, it is a joint venture. The two conditions for assessing the income under the status of an association of persons are : (1) there must be joint venture and (2) that the object of the joint venture is to earn income. If both the conditions are satisfied, the Income-tax Officer cannot tax theincome in the status of an individual. It has got to be assessed under the head 'association of persons' and the question answered in favour of the Revenue.

4. As the facts in that case are similar to the one referred to us we also hold that the question has to be answered in favour of the Revenue and against the assessee.