B. Rajani Kanth V. The Income Tax officer Ward 4(3) Hyderabad

ITTA/4/2012

AI Insights

The case involves B. Rajani Kanth, who, represented by his mother Smt. B. Sashikala, appealed against an order of the Income Tax Appellate Tribunal, Hyderabad, which had classified the prize money won from the television game show 'Kaun Banega Crorepati' as income. The primary legal question was whether the prize money falls under the definition of 'income' as per Section 2(24)(ix) of the Income Tax Act, 1961. The court referenced the Supreme Court's interpretation in Commissioner of Income Tax v. G.R. Kartikeyan, which supported a broad interpretation of income to include winnings from games of skill and chance. The court also considered the Explanation added to the section in 2001, which explicitly includes game show winnings as income, effective from the assessment year 2002-03. The court concluded that the prize money received by the appellant is indeed income, dismissing the appeal.

• Counselvise Citation: [2012] 140 COUNSELVISE.COM (IT) 808084 (HC-HYDERABAD)
• Appeal Type: Others
• Pronouncement Date: 14-03-2012
• Assessment Year: misc
• Other Referred Cases: Commissioner of Income Tax v. G.R. Kartikeyan
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Revenue
• Court: HIGH COURT
• Keywords: Income; Prize Money; Television Game Show; Kaun Banega Crorepati; Section 2(24)(ix)
• Section: 2(24)(ix)

Judgement Text

"THE HON’BLE THE CHIEF JUSTICE SHRI MADAN B. LOKUR AND THE HON’BLE SHRI JUSTICE SANJAY KUMAR INCOME TAX TRIBUNAL APPEAL NO.4 OF 2012 DATED:14.3.2012 Between: B. Rajani Kanth Hyderabad Rep. by his mother – Smt. B. Sashikala General Power of Attorney … Appellant And The Income Tax officer Ward 4(3) Hyderabad … Respondent THE HON’BLE THE CHIEF JUSTICE SHRI MADAN B. LOKUR AND THE HON’BLE SHRI JUSTICE SANJAY KUMAR INCOME TAX TRIBUNAL APPEAL NO.4 OF 2012 JUDGMENT: (per the Hon’ble the Chief Justice Shri Madan B. Lokur) The appellant is aggrieved by an order dt.25.5.2007 passed by the Income Tax Appellate Tribunal, Hyderabad Bench ‘B’, Hyderabad, in I.T.A. No.502/Hyd/2005, relevant for the assessment year 2001-02. 2. The assessee participated in a television programme called ‘Kaun Banega Crorepati’ and was awarded prize money of Rs.12,50,000/-. 3. The question that arises for consideration is whether this prize money would be his income within Section 2(24)(ix) of the Income Tax Act, 1961 (for short, ‘the Act’). 4. Section 2(24)(ix) of the Act reads as follows: “In this Act, unless the context otherwise requires: (24) “Income” includes, (ix) Any winnings from lotteries, crossword puzzles, races including horse races, cards games and other games of any sort or from gambling or betting of any form or nature whatsoever.” 5. The interpretation of this clause came up for consideration in Commissioner of Income Tax v. G.R. Kartikeyan[1]. The Supreme Court was of the view that the words “other games of any sort\" occurring in the sub-section are of wide amplitude. That being the position, in our view, a television game show such as Kaun Banega Crorepati is “other games of any sort” and therefore the receipts of a participant from such a game show would amount to income. The Supreme Court observed as follows: “What is the implication flowing from insertion of Clause (ix)? If the monies which are not earned - in the true sense of the word - constitute income why do monies earned by skill and toil not constitute income? Would it not look odd, if one is to say that monies received from games and races of gambling nature represent income but not those received from games and races of non-gambling nature? The rally in question was a contest, if not a race. The respondent-assessee entered the content to win it and to win the first prize. What he got was a return' for his skill and endurance. Then why is it not income - which expression must be construed in its widest sense. Further, even if a receipt does not fall within Sub-clause (ix), or for that matter, any of the Sub-clauses in Section 2(24), it may yet constitute income. To say otherwise, would mean reading the several clauses in Section 2(24) as exhaustive of the meaning of income' when the Statute expressly says that it is inclusive. It would be a wrong approach to try to place a given receipt under one or the other Sub-clauses in Section 2(24) and if it does not fall under any of the Sub-clauses, to say that it does not constitute income. Even if a receipt does not fall within the ambit of any of the Sub-clauses in Section 2(24), it may still be income if it partakes of the nature of the income. The idea behind providing inclusive definition in Section 2(24) is not to limit its meaning but to widen its net. This Court has repeatedly said that the word income' is of widest amplitude, and that it must be given its natural and grammatical meaning.” 6. Learned counsel for the assessee submitted that an Explanation was added to Section 2(24)(ix) of the Act some time in 2001 with effect from 1.4.2002. The Explanation reads as follows: “Explanation: For the purpose of this sub-clause, – i) ‘lottery’ includes winnings from prizes awarded to any person by draw of lots or by chance or in any other manner whatsoever, under any scheme or arrangement by whatever name called; ii) ‘card game and other game of any sort includes any game show, an entertainment programme on television or electronic mode, in which people compete to win prizes or any other similar game.” 7. Learned counsel also refers to a Circular which has been cited in 252 ITR 74 (Statutes) which reads as follows: “6. Definition of lottery and card game and other game of any sort: 6.1. Sub-clause (ix) of clause (24) of section 2 of the Income Tax Act refers to income as including any winnings from lotteries, crossword puzzles, races including horse races, card games and other game of any sort or from gambling or betting of any form or nature whatsoever. 6.2. An explanation has been inserted by the Act in the said sub-clause to clarify that ‘lottery’ shall include winnings from prizes awarded to any person by draw of lots or by chance or in any other manner whatsoever under any scheme or arrangement by whatever name called. It has also been clarified that ‘card game and other game of any sort’ shall include any game show, an entertainment programme on television or electronic mode, in which people compete to win prizes or any other similar game. 6.3. The amendment will take effect from 1st April, 2002 and will, accordingly, apply in relation to the assessment year 2002-2003 and subsequent years.” 8. According to learned counsel for the assessee, if a game show on television or any other electronic media is also included in Section 2(24) (ix) of the Act, there is no necessity of enacting the Explanation. He submits that the Explanation has been made effective from 1.4.2002 and that it applies from assessment year 2002-03 onwards indicates that the receipt earned by the assessee in the game show conducted on 3.12.2000 would not be “income” within the meaning of the Explanation to Section 2(24)(ix) of the Act. 9. In our opinion, this interpretation given by learned counsel is not acceptable for the simple reason that the Explanation has to be given the widest possible meaning. If it is given that meaning, the receipt by the assessee would fall within the definition of income received from participation in ‘other games of any sort’. The Explanation is merely clarificatory in nature and does not detract from the basic interpretation of Section 2(24)(ix) of the Act. In our opinion no substantial question arises for consideration. 10. Dismissed. 11. Miscellaneous application also stands dismissed. __________________ MADAN B. LOKUR, CJ __________________ SANJAY KUMAR, J 14-3-2012 bnr [1] [1993] 201 ITR 866 "