COMMISSIONER OF INCOMET AX vs. DELHI RACE CLUB LTD

IN THE HIGH COURT OF DELHI AT NEW DELHI . . ITA 128/2008 . . COMMISSIONER OF INCOME TAX ..... Appellant . . Through Ms.Premlata Bansal, Advocate. . versus . . DELHI RACE CLUB LTD ..... Respondent Through None. . . CORAM: HON'BLE MR. JUSTICE MADAN B. LOKUR HON'BLE MR. JUSTICE V.B. GUPTA . . O R D E R 28.02.2008 . . Two issues have been raised in this Appeal. The first issue pertains to the interpretation of Section 194BB read with Section 10 (3) of the Income Tax Act, 1961. Issue notice to the Respondent in respect of the first issue, returnable on 14th August, 2008. . ITA 128/2008 page 1 of 3 . The second issue that has been raised is whether the Tribunal was correct in holding that the Assessee was entitled to deduct the investment made by a person who places a bet in a horse race and earns some income as a result of that bet. The procedure that is followed by the Assessee is that out of the winnings of the punter the investment made by him towards the bet is deducted and on the actual winnings, tax is deducted at source. According to learned counsel for the Revenue, tax should be deducted at source by the Assessee on the entire amount including the investment or the money spent by the punter for making the bet. In our opinion this is not the correct way of interpreting the law relating to deduction of tax at source. It is tax on the winnings that ought to be deducted, as has rightly been held by the Tribunal. The total prize money includes the investment made by the punter and tax cannot be deducted at source on the investment made by him. . ITA 128/2008 page 2 of 3 . . As far as the second issue is concerned we find that no substantial question of law arises. Dismissed. . . MADAN B. LOKUR, J . . . . V.B. GUPTA, J FEBRUARY 28, 2008 Bp . . . . . . . . . . . . . . . ITA 128/2008 page 3 of 3 .