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2004 Supreme(Raj) 524
High Court Of Rajasthan
Judgename : Y.R. Meena
Shashi Kant Sharma - Appellant
Versus
Commissioner of Income Tax CWT - Respondent
Income Tax Appeal No. 113 of 2002
Decided On : 05/20/2004
R.B. Mathur, Advocate for the Appellant
Vivek Singhal, Advocate for the Respondents
Headnote:
Lottery - Taxation - Section 69 - ITA No. 113 of 2002, WTANo. lof 2002, ITANo. 128 of 2003, ITA No. 55 of 2004, ITA No. 56 of 2004, ITANo. 131 of 2002, ITA No. 127 of 2003 - The court discussed the applicability of Section 69 of the Income Tax Act in relation to the taxation of lottery winnings. The court considered the evidence presented and the failure of the AO to conduct a thorough investigation, leading to the deletion of the additions made under Section 69 in the hands of the assessee. The court also emphasized the importance of proper enquiry and the burden of proof on the tax department to establish the authenticity of the lottery ticket purchase.
Fact of the Case:
The case involved a search conducted at the residence of three brothers where an incriminating document related to a lottery ticket was found. The tax department alleged that the brothers purchased the ticket to convert black money into white. The brothers disclosed a share of the lottery amount in their returns, but the AO taxed the entire amount in the hands of one brother and two-thirds in the hands of the other two brothers.
Finding of the Court:
The court found that the AO failed to conduct a thorough investigation as directed by the CIT(A), leading to the deletion of the additions made under Section 69. The court also held that the entire amount of lottery winnings should be taxed in the hands of all three brothers as disclosed by them in their returns.
Issues: The issues revolved around the taxation of lottery winnings, the adequacy of the AO's investigation, and the burden of proof on the tax department to establish the authenticity of the lottery ticket purchase.
Ratio Decidendi: The court emphasized the importance of a proper enquiry and the burden of proof on the tax department to establish the authenticity of the lottery ticket purchase. The court also highlighted the failure of the AO to conduct a thorough investigation as directed by the CIT(A).
Final Decision: The court dismissed all seven appeals, affirming the deletion of the additions made under Section 69 and directing that the entire amount of lottery winnings should be taxed in the hands of all three brothers as disclosed by them in their returns.
Y.R. Meena, J.-These seven connected appeals involve the common issue, therefore, we heard and disposed of all these appeals by this common order.
2. These appeals are admitted on the questions of law, which read as under:
For asst. yr. 1988-89 in ITA No. 113 of 2002
1. Whether, in the facts and circumstances of the case, there was any material on record for CIT(A) to direct to tax the lottery amount in the hands of all three brothers?
2. Whether, in the facts and circumstances of the case, the Tribunal was justified and right in law in upholding the order of the CIT(A) deleting the additions made under s. 69 in the hands of one assessee substantively by the AO on the basis of enquiry conducted ?“
Forasst.yr. 1988-89inWTANo. lof 2002
1. Whether, in the facts and circumstances of the case, the Tribunal was justified and right in law in upholding the order of the CIT(A) deleting the additions made in the hands of assessee in the wealth-tax assessment which was based upon enquiry conducted by AO?“
For asst. yr. 1988-89 in ITANo. 128 of 2003
1. Whether there was any material on record for CIT(A) to hold that the lottery amount in the hands of all three brothers is to be substantively taxed for the year in question?
2. Whether the Tribunal was justified and right in law in upholding the order of the CIT(A) deleting the additions made under Section 69 in the hands of one assessee substantively by the AO on the basis of enquiry conducted?
3. Whether the Tribunal and CIT(A) were right in law in taking a view different than the view of the AO, when the assessee has failed to prove the authenticity of the purchase of lottery ticket and on the basis of evidence the AO has made additions under Section 69 of the Act ?“
For asst. yr. 1988-89 in ITA No. 55 of 2004
1. Whether, in the facts and circumstances of the case, the Tribunal was justified and right in law in upholding the order of the CIT(A) deleting the additions made under Section 69 in the hands of one assessee substantively by the AO on the basis of enquiry conducted ?“
For asst. yr. 1989-90 in ITA No. 56 of 2004
1. Whether, in the facts and circumstances of the case, there was any material on record for CIT(A) to direct to tax the lottery amount in the hands of all three brothers?
2. Whether, in the facts and circumstances of the case, the Tribunal was justified and right in law in upholding the order of the CIT(A) deleting the additions made under Section 69 in the hands of one assessee substantively by the AO on the basis of enquiry conducted ?“
For asst.yr. 1989-9OinITANo. 131 of 2002
1. Whether, in the facts and circumstances of the case, there was any material on record for CIT(A) to direct to tax the lottery amount in the hands of all three brothers?
2. Whether, in the facts and circumstances of the case, the Tribunal was justified and right in law in upholding the order of the CIT(A) deleting the additions made under Section 69 in the hands of one assessee substantively by the AO on the basis of enquiry conducted?
3. Whether, in the facts and circumstances of the case, the Tribunal and CIT(A) were right in law in taking different view than AO when the assessee has failed to prove about the authenticity of purchase of lottery and on the basis of evidence the AO has made additions under Section 69 of the Act?
4. Whether, in the facts and circumstances of the case, the CIT(A) was justified in upholding that AO has not conducted the enquiry as per direction whereas in fact the AO has made all efforts to carry out the directions ?“
For asst. yr. 1989-90 in ITA No. 127 of 2003
1. Whether there was any material on record for CIT(A) to hold that the lottery amount in the hands of all three brothers is to be substantively taxed for the year in question?
2. Whether the Tribunal was justified and right in law in upholding the order of the CIT(A) deleting the additions made under Section 69 in the hands of one assessee substantively by the AO on the basis of enquiry conducted?
