Income Tax Authorities Failed to Determine Whether Taxed Amount is Lottery Win or Corporate Gift: ITAT Sends Matter Back to AO for Fresh Consideration [Read Order]
Assessee reportedly won a bike through the scratch card, with the value being Rs. 31,900. Therefore, the assessee argued, it should not be taxed as lottery winnings.
![Income Tax Authorities Failed to Determine Whether Taxed Amount is Lottery Win or Corporate Gift: ITAT Sends Matter Back to AO for Fresh Consideration [Read Order]](https://www.taxscan.in/wp-content/uploads/2025/05/corporate-gift-site-img.jpg "Income Tax Authorities Failed to Determine Whether Taxed Amount is Lottery Win or Corporate Gift: ITAT Sends Matter Back to AO for Fresh Consideration [Read Order]")
The Income Tax Appellate Tribunal ( ITAT ), Ranchi Bench, has set aside an income tax demand after finding that the income tax authorities failed to clearly determine whether the taxed amount was lottery winnings or a gift. The tribunal has remanded the matter back to the Assessing Officer ( AO ) for fresh consideration. Surendra Ram Bharti, the appellant, contested the tax assessment for...
The Income Tax Appellate Tribunal ( ITAT ), Ranchi Bench, has set aside an income tax demand after finding that the income tax authorities failed to clearly determine whether the taxed amount was lottery winnings or a gift. The tribunal has remanded the matter back to the Assessing Officer ( AO ) for fresh consideration.
Surendra Ram Bharti, the appellant, contested the tax assessment for the assessment year 2008-09. The core dispute centered on Rs. 31,900 received by Bharti, which the Assessing Officer taxed as lottery winnings. The Assessing Officer allowed a relief of Rs. 5,000 under the Income Tax Act, 1961, and added Rs. 26,767 to be taxed at a higher rate under Section 115BB(ii) of the Income tax law.. The Commissioner of Income Tax (Appeals) upheld this decision.
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Appellant’s representative argued that the amount was not a lottery win but a gift from TATA Teleservices Ltd. in the form of a scratch card. Assessee reportedly won a bike through the scratch card, with the value being Rs. 31,900. Therefore, the assessee argued, it should not be taxed as lottery winnings.
The tribunal, after considering the submissions and evidence, noted a critical gap in the lower authorities' orders. It observed that neither the Assessing Officer nor the Commissioner of Income Tax (Appeals) had properly determined whether the receipt was a lottery win or a gift. The tribunal emphasized the necessity of verifying relevant facts to ascertain the taxability of an income.
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Consequently, Partha Sarathi Choudhury (Judicial Member) decided to set aside the order of the Commissioner of Income Tax (Appeals). The matter was remanded to the Assessing Officer for a fresh decision, with instructions to conduct necessary verification and pass a new order in accordance with the law and principles of natural justice. The Assessing Officer was directed to provide a reasonable opportunity of hearing to the assessee.
In conclusion, the ITAT allowed the assessee's appeal for statistical purposes, pending the Assessing Officer's fresh review.
To Read the full text of the Order CLICK HERE
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