Commissioner of Income Tax vs George and Others

A. Subbulakshmy, 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, the Appellate Tribunal was right in law in holding that P. George and eleven others

who won the lottery of Rs. 11 lakhs were not assessable to Income Tax in respect of the said lottery winning, in the status of body of individuals ?

A group of 12 persons jointly purchased lottery tickets and one of the tickets won the second prize. The Assessing Officer held that there was a

common aim involved in the joint venture and had common interest in all the tickets to earn income. On appeal, the Commissioner held that the

persons who won the ticket should be considered as co-owners of the ticket and hence they should be assessed as co-owners individually and not

jointly in the status of body of individuals. The Tribunal confirmed the view of the Commissioner.

This court in the case of Commissioner of Income Tax Vs. A.U. Chandrasekharan and Others, has held that in the case of several persons

entering into a written agreement for purchase of lottery tickets from contributions, the winnings have to be, equally distributed and the prize money

is assessable in the status of association of persons u/s 2(24) of the Income Tax Act, 1961, since the two conditions for assessing the income

under the status of an association of persons (a) that there must be joint venture, and (b) that the object of the joint venture must be to earn

income, had been satisfied and, therefore, the assessees were assessable in the status of association of persons.

In the instant case, the two conditions are satisfied and, therefore, following the above decision and for the reasons stated therein, we answer the

question in favour of the Revenue and against the assessee, holding that the assessees are assessable as an association of persons. No costs.