High Court Of Madras
CIT vs. A. Abdul Jaffar & Anr.
R. Jayasimha Babu & K. Gnanaprakasam, JJ.
Tax Case No. 901 of 1988
14th February, 2001
Mrs. Chitra Venkataraman, for the Revenue
K. GNANAPRAKASAM, J. :
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 BOI was correct ?”
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 12th Oct., 1983. The ticket won a price 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. 90,00 each. But the ITO made an assessment in the status of BOI 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 ITO was set aside on the ground that these two persons are only co-owners of the prize money and did not constitute a BOI. On further appeal, the order of the AAC was confirmed by the Tribunal. In the said circumstances only the above question has been referred to us.
A similar question came up for consideration of this Court in the case of CIT vs. A.U. Chandrasekharan (1997) 141 CTR (Mad) 177 : (1998) 229 ITR 406 (Mad) : TC S.44.3805, wherein this Court, after consideration 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 AOP 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 ITO cannot tax the income in the status of an individual. It has got to be assessed under the head “AOP” and the question answered in favour of the Revenue.
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.
[Citation : 250 ITR 736]