- (1.) The revenue is in appeal against the order dated 16-12-2003, passed by the Income Tax Appellate Tribunal, Chandigarh Bench A (for brevity, the Tribunal), holding that the assessee-respondent was not liable to pay tax on the prize of 1 Kg. Gold won by him as it did not form part of his income within the meaning of clause (ix) of sub-section (24) of Section 2 of the Income-tax Act, 1961 (for brevity, the Act) in respect of Assessment Year 1996-97. The facts of the case as revealed in the order of the Tribunal are that the assessee-respondent subscribed Rs. 10,000/- to PPF which formed part of Small Savings Scheme encouraged by the Government of Punjab. The scheme formulated by the Government of Punjab provided incentive to encourage small savings to augment its resources. According to the scheme the Government issued lucky coupon on every investment of Rs. 5,000/-, which also covered investment in PPF. The assessee-respondent was also issued a lucky coupon which won the prize of 1 Kg. Gold. The Assessing Officer regarded the prize as income and found that it was worth Rs. 4,68,000/-. However, the assessee-respondent claimed exemption in respect of the value of gold arguing that it was actually an incentive and, therefore, it was not covered by the definition of expression income within the meaning of Section 2(24)(ix) of the Act, which deals with winning of lotteries, crossword puzzles, races including horse races, card games and other games of any sort or from gambling or betting of any form or nature.
(2.) The argument raised by the assessee-respondent was that the gold received by him did not amount to winning from lottery because for the purpose of lottery the assessee has to purchase a ticket and he loses the amount spent on purchase of lottery ticket. In case of contribution to small savings scheme a person obtains a return on his investment and there is no risk of loss on the amount contributed. However, the Assessing Officer held that the prize won by the assessee-respondent falls within the meaning of Section 2(24)(ix) of the Act and accordingly addition of Rs. 4,68,000/- in the income of the assessee-respondent in respect of Assessment Year 1996-97 was made.
(3.) The assessee-respondent filed an appeal before the Commissioner of Income Tax (Appeals) accepted the argument of the assessee and deleted the impugned addition. The view of the CIT (A) is discernible from the following para, which reads thus:- 5. I have considered the arguments advanced by the A.R. and also by the AO who represented the matter, as well as gone through the assessment order. 5.1 In my view where no definition of the word lottery has been given in the statute then the common dictionary meaning would have to be applied and as per this meaning the Concise Oxford dictionary defines "Lottery" as under: 1. a means of raising money by selling numbered tickets and giving prize to the holders of numbers drawn at random. 2. an enterprise, process etc., whose success is governed by chance. In the present scheme of giving prizes, whereas there was an element of chance as there is in a lottery, but there was no purchasing of tickets or pooling of such proceeds as such. It was rather an investment. There was no element of risk involved in the sense that an investor could lose his money. It may be observed that all the categories which are brought to tax in section 2(24)(ix) concerns those schemes where there was an element of risk meaning that a person could lose part of his money except in the case of cross-word puzzles which has been specifically mentioned therein. I agree with the view of the learned counsel of the appellant that in such matters where certain items are brought to tax only by virtue of a taxing provisions, then the said taxing provision had to be applied strictly and nothing more can be added therein. In these facts and circumstances the arguments advanced by the appellant would have to be upheld and the amount realised would not fall within the provisions of Section 2(24)(ix) and cannot be brought to tax. The appellant would be entitled to relief of the like amount and the appeal stands allowed.;