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Wg. Cdr. K.P.K. Ghose Vs. Income-tax Officer - Court Judgment

LegalCrystal Citation
CourtIncome Tax Appellate Tribunal ITAT Allahabad
Decided On
Judge
Reported in(1983)5ITD413(All.)
AppellantWg. Cdr. K.P.K. Ghose
Respondentincome-tax Officer
Excerpt:
.....the previous year relevant to this assessment year, the assessee participated in the contest of bombay dyeing & manufacturing co. ltd., bombay for caption writing by completing a sentence praising bombay dyeing fabrics in a few words.the assessee's entry was adjudged for a prize and the assessee got a prize of rs. 30,000 for this caption writing. it was claimed before the ito that this amount was a windfall or, alternatively, it was exempt under section 10(17a) of the income-tax act, 1961 ('the act'). the ito, however, did not accept this claim and included the prize of rs. 30,000 in the assessee's total income. when the matter went up in appeal, the aac held that this amount of rs. 30,000 was income within the meaning of section 2(24)(ix) of the act and that it was not entitled.....
Judgment:
1. This is an appeal filed by the assessee against the order of the AAC.2. The assessee is an individual and the appeal relates to the assessment year 1979-80. During the previous year relevant to this assessment year, the assessee participated in the contest of Bombay Dyeing & Manufacturing Co. Ltd., Bombay for caption writing by completing a sentence praising Bombay Dyeing fabrics in a few words.

The assessee's entry was adjudged for a prize and the assessee got a prize of Rs. 30,000 for this caption writing. It was claimed before the ITO that this amount was a windfall or, alternatively, it was exempt under Section 10(17A) of the Income-tax Act, 1961 ('the Act'). The ITO, however, did not accept this claim and included the prize of Rs. 30,000 in the assessee's total income. When the matter went up in appeal, the AAC held that this amount of Rs. 30,000 was income within the meaning of Section 2(24)(ix) of the Act and that it was not entitled to exemption under Section 10(17A). He, therefore, upheld this addition made by the ITO and dismissed the assessee's appeal. The assessee has, therefore, come up in the present appeal before us.

3. The assessee's learned counsel, Shri Kumar, submitted to us that the ruding of the Hon'ble Madras High Court in the case of CIT v. G.R.Karthikeyan [1980] 124 ITR 85, dealt with winnings from races where the winnings were without any effort, exertion or skill and, therefore, this ruling of the Hon'ble High Court of Madras will not be applicable in the assessee's case. The assessee, therefore, submitted that the prize money of Rs. 30,000 received by the assessee could not be called a windfall or, alternatively, it cannot be equated with lottery winnings where again the winnings were purely by luck and not due to any exertion, skill or effort on the part of the assessee.

4. On the other hand, according to Shri Kumar, these winnings were of the nature described under Section 10(17A), that is, awards for literary, scientific or artistic work or for proficiency and, were, therefore, entitled to exemption under Section 10(17A). He, therefore, vehemently argued before us that the amount of Rs. 30,000 received by the a ssessee for participating in the Bombay Dyeing contest was not liable to tax and was wrongly included by the revenue authorities in the assessee's total income.

5. On the other hand, the learned departmental representative, Shri Prakash, relied on the orders of the revenue authorities in support of the department's case.

6. We have carefully considered the rival submissions. Their Lordships of the Hon'ble Supreme Court in the case of Navinchandra Mafatlal v.CIT [1954] 26 ITR 758 quoted with approval the observations of their Lordships of the Privy Council in the case of Raja Bahadur Kamakshya Narain Singh of Ramgarh v. CIT [1943] 11 ITR 513 that 'income'is a word difficult and perhaps impossible to define in any precise general formula and is a word of the broadest connotation. Even the definition of the word 'income' appearing in Section 2(24) is merely inclusive and not exhaustive and, therefore, a very wide meaning should be given to this expression in order to include almost every kind of receipt or gain and also the notional incomes mentioned in Clause (24) of Section 2. Viewed in this context, it is not under dispute that the assessee put in his skill, exertion and effort for participating in the Bombay Dyeing contest and was awarded the prize of Rs. 30,000 for caption writing which was adjudged as the best by the Bombay Dyeing authorities. This was, therefore, a receipt or gain arising from effort, skill and exertion by the assessee and was, therefore, of the nature of income. The only point, therefore, that remains is whether this income is entitled to exemption under Section 10(17A). Section 10(17A) as it then stood for the assessment year 1979-80, reads as follows : (17A) any payment made, whether in cash or in kind, in pursuance of awards for literary, scientific and artistic work or attainment, or for proficiency in sports and games, instituted by the Central Government or by any State Government or approved by the Central Government in this behalf : Provided that the approval granted by the Central Government shall have effect for such assessment year or years (including an assessment year or years commencing before the date on which such approval is granted) as may be specified in the order granting the approval ; A plain reading of this clause clearly shows that the exemption is only for those awards which are for literary, sc ientific or artistic work or attainment or for proficiency in sports and games which are instituted by the Central Government or by the State Government or approved by the Central Government for this purpose. Viewed in this context, in spite of a specific query by the Bench, the assessee's learned counsel, Shri Kumar was not able to show to us that this prize of Rs. 30,000 for participating in the Bombay Dyeing contest was instituted by the Central Government or by the State Government or approved by the Central Government for the purposes of exemption under Section 10(17A). The assessee's claim, therefore, that this prize of Rs. 30,000 was entitled to exemption under Section 10(17A), cannot, in these circumstances, be accepted. We, therefore, agree with the revenue authorities that this prize of Rs. 30,000 was liable to tax and was to be included in the assessee's total income. On this issue, therefore, no interference with the orders of the revenue authorities appears called for.

7 to 9. [These paras are not reproduced here as they involve minor issues.]


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