DR.

RAM MANOHAR LOHIYA NATIONAL LAW

UNIVERSITY, LUCKNOW.

LAW OF TAXATION
SYNOPSIS
ON
CIT vs. G.R. Karthikeyan, Coimbatore
1993 SCR (3) 328

Under The Guidance of: Submitted by:-

Mr. Anil Sain Gulafsha

Asst. Professor (Law) Enrol no- o61
Dr. RMLNLU VII Semester

Signature of Professor Signature of student

ACKNOWLEDGEMENT
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I take this opportunity to express my profound gratitude and deep regards to my Assistant

Professor Mr. Anil Sain for his exemplary guidance, monitoring and constant

encouragement to give shape to this project. The blessing, help and guidance given by him

time to time shall carry me a long way in the journey of life on which I am about to embark.

I also take this opportunity to express a deep sense of gratitude to my respected seniors who

share their cordial support, valuable information and guidance, which helped me in

completing this task through various stages.

Lastly, I thank the almighty, my parents, brother, sisters and friends for their constant

encouragement without which this assignment would not have been possible.

Gulafsha

OBJECTIVE

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The objective of this project is to study the case law thoroughly and analyse it. This case will
help to understand the concept of ‘income’ in a more comprehensive way.

METHODOLOGY

The methodology of the research is DOCTRINAL research methodology i.e. the method of
analysis is descriptive and analytical .While researching on the topic, various books and
internet sources have been consulted. The project topic has been elaborated to best of
knowledge and available information.

INTRODUCTION
The assessee participated in an All India Highway Motor Car Rally and on being declared a
winner, received an amount of Rs. 22,000 as prize money. The Income-tax officer included
the prize money in his income for the relevant assessment year relying upon the definition of
'income' in Section 2(24) of Income Tax Act. On an appeal preferred by the respondent-
assessee the Appellate Assistant Commissioner held that as the Rally was not a race, the
prize money cannot be treated as income within the meaning of section2(24)(ix).

The Tribunal, on an appeal, held that the Rally was not a race and as it was a test of skill and
endurance, it was not a 'game' within the meaning of Sec. 2 (24) (ix). As the prize money
received was casual in nature it fell outside Sec. 10(3) of the Act.

The High Court on a reference at the instance of the Revenue, upholding the findings of
the Tribunal, observed that the expression 'winnings' connotes money won by betting or
gambling and therefore the prize money not represent 'winnings'. Inasmuch as the
amount in question was obtained by participating in a rally which involved skill in driving
the vehicle, it held, it cannot he included in the assessee's income, also because it fell
outside the preview of s.10 (3).

Allowing the Appeal, the Supreme Court, held that:

 The expression 'income' must be construed in its widest sense.

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  The definition of 'income' is an inclusive one. Even if a receipt does not fall within
sub-clause (ix) or any of the sub-clauses of Sec. 2(24) of the Act it may yet constitute
income. Hence the prize-money received by the respondent assessee constitutes
'income' -as defined in Section 2(24)
 The High Court erred in reading several sub-clauses in Sec 2(24) as exhaustive when
the statute expressly says that the definition is inclusive. Even if a receipt does not
fall within the ambit of any of the sub-clauses in Sec. 2(24) it may still he income if it
partakes of the nature of income. The idea behind providing inclusive definition in
Sec. 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. (Kamakshya Narayan Singh v. C.LT )
 The Rally was a contest, if not a race. The Respondent- assessee entered the contest
to win it. The Prize-money which he got in return for winning the contest was a
reward for his skill and endurance. It does constitute his income- which expression
must be construed in its widest sense.
 The sub-clause (ix) of Sec. 2(24), is not confined to games of gambling nature alone.
Some of them are games of skill.
 As the definition of income in Sec. 2(24) is an inclusive one, its ambit should be
the same as that of the word 'income' occurring in Entry 82 of list 1 of the Seventh
Schedule of the Constitution of India.
 Even casual income is 'income' as is evident from Sec. 10(3). A casual receipt
which should mean in the context, casual income-is liable to be included in the total
income, if it is in excess of Rs. 1,000 by virtue of Sec 10(3).

TENTATIVE CHAPTERISATION
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  INTRODUCTION
 FACTS
 ISSUES
 LAW ON THE POINT
 DECISION
 RATIO
 ANALYSIS AND CONCLUSION

BIBLIOGRAPHY
 www.scconline.com