COMMISSIONER OF INCOME TAX, MADRAS versus G.R. KARTHIKEYAN, COIMBATORE

Citation: [1993] 3 S.C.R. 328 · Decided: 22-04-1993 · Supreme Court of India · Bench: B.P. JEEVAN REDDY · Disposal: Appeal(s) allowed

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Judgment (excerpt)

A 
B 
c 
D 
E 
F 
G 
COMMISSIONER OF INCOME TAX, MADRAS 
v. 
G.R. KARTHIKEY AN, COIMBATORE 
APRIL 22.1993 
[B.P.JEEVAN REDDY AND N. VENKATACHALA,JJ.] 
Income Tax Act 1961: 
Sections 2(24)and 10(3 )-For Assessment-What constitutes Income-Prize 
Money-From All India Motor Car Rally-Whether constitutes Income. 
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 mone~·. 
The Income-tax officer included the prize money in his income for the 
relevant assessment year relying upon the definition of'income' in clause (24) 
of Section 2 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 section .2(24) (ix). The 
Tribunal on an appeal ht the Revenue, held that the Rally was not a race and 
as it was a test of skill an~ endurance, it was not a 'game' within the meaning 
of Sec. 2 (24) (ix). As th¢ prize money received was casual in nature it fell 
outside Sec. 10(3) of the :Act. 
The High Court on !l reference at the instance of the Revenue, upholding 
the findings of the Tribu~al, observed thatthe expression' winnings' cannotes 
money won by betting 'or gambling and therefore the prize money not 
represent 'winnings'. In~smuch as the amount in question was obtained by 
participating in a rally which involved skill in driving the vehicle, it held, It 
cannot be included in th~ assessee's income, also because it fell outside the 
perview of s.l 0 (3). 
Allowing the Appeal, the Court, 
HELD: 1. The expression 'income: must be construed in its widest sense. 
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 ma~· 
H 
yet constitute 'income. Hence the prize-money received by the respondent-
328 
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C.I.T. v. G.R. KARTIHKEYAN 
329 
assessee constitutes 'income' ·as defmed in clause (24) of Section 2 of the Act. 
(335-C) 
2. 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 be 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. (335-D) 
Kamakshya Narayan Singh v. C./. T 11 ITR 513 P.C., Navin Chandra 
Mafatla.l v. C.I.T, Bombay 26 ITR (SC) and Bhagwan Das Jain v. Union of India 
128 ITR 315 SC, followed. 
Go pal Saran Narain Singh v. Commissioner of Income Tax, 3 ITR 237 P.C., 
referred to. 
3. If the monies which are not earned in the true sense of the word 
Constitute income, it is difficult to appreciate why do monies earned by skill 
A 
B 
c 
D 
and toil not constitute income? The Rally was a contest, if not a race. The 
Respondent-assessee entered the contest to win it. The Prize-money which he 
E 
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. (335-8) 
4. The sub-clause (ix) of Sec. 2(24), is not confined to games of gambling 
nature alone. Some of them are games of skill. 
F 
State of Bombay v. R.M.D. Chamarbaugwala AIR 1957 SC 699; and State 
of Andhra Pradesh v. K. Satyanarayan [196812 SCR 515, followed. 
5. As the definition of income in Sec. 2(24) is an inclusive one, its ambit G 
should be the same as that of the word 'income' occurring in Entry 82oflist 
I of the Seventh Schedule of the Constitution of India. (334-8) 
6. 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, ifit is in excess of Rs.1,000 by virtue of clause (3) 
H 
330 
SUPREME COURT REPORTS 
(1993) 3 S.CJt 
A 
of Sec. 10. The Tribunal erred in its finding that the prize money fell outside 
the purview of Sec. 10 (3) inspite of holding that the receipt in question as 
casual in nature. (335-E) 
B 
CIVILAPPELLATEJURISDICTION: Civil Appeal No. 3908 (NT)/1983. 
From the Judgment and Order dated 20.11.1979 of the

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