T.V. Rajagopala Rao, Judicial Member - (1.) THIS is a departmental appeal against the order of the Appellate Assistant Commissioner, 'B' Range, Hyderabad, dated 20-3-1985 and it relates to assessment year 1980-81.
(2.) The assessee is an individual. He had participated in Amru-thanjan Slogan Contest which announced a Premier Padmini car or Rs. 40,000 as first prize for the best entry. The conditions of the contest were that the contestant had to fill the entry form mentioning the effect of Amritanjan on the body when it is applied and also to coin a slogan on Amritanjan. The decision of the company was final and binding. The assessee won the first prize in the contest and opted for Premier Padmini car in preference to a cash of Rs. 40,000. In his first return dated 19-8-1980 he declared the income of Rs. 40,000 as winnings from lottery and claimed deduction under Section 80T. However, vide revised return dated 25-11-1981 the assessee claimed that the income received from the prize winning from Amritanjan company was totally exempt from tax as it was casual and non-recurring. The Income-tax Officer did not agree with the contention of the assessee and taxed the income at Rs. 39,000 under Section 2(24){ix) of the Income-tax Act. Before the Appellate Assistant Commissioner in appeal it was urged that the winning from slogan contest organized by the company does not fall under Section 2(24)(ix) of the IT Act and it is not income at all to be returned. It was strongly contended that winning of the prize in the said contest requires skill and expertise and it does not depend upon chance, luck, etc. The assessee relied upon the Madras High Court decision in CIT v. G.R. Karthikeyan [1980] 124 ITR 85. The Appellate Assistant Commissioner after having read the Madras High Court ruling and also having regard to the wording in Section 2(24)(ix) of the Income-tax Act felt that the income as denned under Section 2(24) (ix) refers to chance winning only. He had recorded a finding that in the instant contest the prize was won in a competition where use of intelligence and skill was paramount and therefore it cannot be held that the prize was either casual non-recurring receipt nor income as denned in Section 2(24)(ix) of IT Act. He also relied upon Jodhani Nina Pitamber v. ITO [1982] 1 ITD 332 (Indore). In the result, he allowed the appeal and deleted Rs. 39,000 from the income computed by the Income-tax Officer.
(3.) AS against the impugned order passed by the Appellate ASsistant Commissioner the department came up in second appeal. According to the department the Appellate ASsistant Commissioner ought to have confirmed the assessment of the amount as casual and non-recurring income since the income was derived by mere chance or it was a casual receipt and there was no certainty of the assessee's slogan for being picked up for a prize. Therefore the winning of the amount of Rs. 40,000 is akin to winning from a competition in the nature of a lottery. Therefore it should be taxed as income under Section 2(24)(ix) of the IT Act. Shri K.C. Devdas, strongly relied upon the Appellate ASsistant Commissioner's order and two decisions relied upon by the Appellate ASsistant Commissioner in support of his connection.;