MAHAVEER KUMAR JAIN versus COMMISSIONER OF INCOME TAX, JAIPUR

Citation: [2018] 3 S.C.R. 875 · Decided: 19-04-2018 · Supreme Court of India · Bench: R.K. AGRAWAL · Disposal: Appeal(s) allowed

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Judgment (excerpt)

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MAHAVEER KUMAR JAIN
v.
COMMISSIONER OF INCOME TAX, JAIPUR
(Civil Appeal No. 4166 of 2006)
APRIL 19, 2018
[R. K. AGRAWAL AND ABHAY MANOHAR SAPRE, JJ.]
Income Tax Act, 1961:
s.5 – Taxability under – Of income from lottery – When such
income was already taxed under Sikkim State Income Tax Rules,
1948 – Held: A taxing statute should not be interpreted in such a
manner that its effect will be to cast a burden twice over for payment
of tax unless language of statute is so compelling that court has no
alternative than to accept it – In case of reasonable doubt,
construction most beneficial to the tax payer is to be adopted – As
such there is no prohibition on double taxation unless the legislature
contains a special provision in that regard – In the present case
since the IT Act does not provide for including income from lottery,
the assessee cannot be subjected to double taxation – Since Sikkim
is part of India for the relevant accounting year, once the assessee
has paid income tax as per the law applicable at the relevant time in
Sikkim, the same income was not taxable under IT Act – In view of
clause (k) of Art. 371F of Constitution also, only the Sikkim
regulations on income-tax would be applicable – Sikkim State
Income Tax Rules, 1948 – Constitution of India – Art. 371F (k) –
Interpretation of Statutes.
Allowing the appeal, the Court
HELD: 1. In the present case, the amount has been earned
by the appellant-assessee in the State of Sikkim and the amount
of lottery prize was sent by the Government of Sikkim to Jaipur
on the request made by the appellant. Therefore, while Section 5
of the Income Tax Act would not be applicable, the existing
Sikkim State Income Tax Rules, 1948 would be applicable.  Since
Sikkim is a part of India for the accounting year, there would
appear to be, on the same income, two types of income-taxes
cannot be applied. [Para 9, 10][882-C-E]
[2018] 3 S.C.R. 875
875
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SUPREME COURT REPORTS
[2018] 3 S.C.R.
2. There is no prohibition as such on double taxation,
provided that the legislature contains a special provision in this
regard. There  is no provision in the IT Act wherein a specific
provision has been made by the legislature for including such an
income by an assessee from lottery ticket. In the absence of any
such provision, the assessee in the present case cannot be
subjected to double taxation. [Para 13][883-A-C]
Jain Brothers and Others v. Union of India and Others
(1970) 77 ITR 107 (SC) – relied on.
Laxmipat Singhania v. Commissioner of Income Tax, U.P.
(1969) 72 ITR 291 – referred to.
3. A taxing Statute should not be interpreted in such a
manner that its effect will be to cast a burden twice over for the
payment of tax on the taxpayer unless the language of the Statute
is so compelling that the court has no alternative than to accept
it. In a case of reasonable doubt, the construction most beneficial
to the taxpayer is to be adopted. Therefore, the income in the
present case is taxable only under one law. [Para 13][883-C]
4. By virtue of clause (k) to Article 371F of the Constitution
which starts with a non-obstante clause, it would be clear that only
the Sikkim Regulations on Income-tax would be applicable in
the present case. Therefore, the income cannot be brought to
tax any further by applying the rates of the IT Act. [Para
13][883-D]
5. Once the assessee has paid the income tax at source in
the State of Sikkim as per the law applicable at the relevant time
in Sikkim, the same income was not taxable under the IT Act,
1961. [Para 14][883-E]
Case Law Reference
(1969) 72 ITR 291
  referred to
Para 11
(1970) 77 ITR 107 (SC)  relied on
Para 11
CIVIL APPELLATE JURISDICTION: Civil Appeal No. 4166
of 2006.
From the Judgment and Order dated 10.09.2004 by the High Court
of Judicature for Rajasthan, Jaipur, Bench at Jaipur in DB Income Tax
Reference No. 40/1995.
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Sanjay Jhanwar, Tanuj Agrawal, Tarun Gupta, Advs. for the
Appellant.
Yashank P. Adhiyaru, Sr. Adv., Ms. Purnima Bhat Kak,
Ms. Sadhana Sandhu (For Mrs. Anil Katiyar),  Advs. for the Respondent.
The Judgment of the Court was delivered by
R. K. AGRAWAL, J. 1. The present appeal has been preferred
against the final judgment and order dated 10.09.2004 passed by the
High Court of Judicature for Rajasthan, Bench at Jaipur in D.B.I.T.
Reference No. 40 of 1995 whereby the Division Bench of the High
Court answered the questions referred to under Section 256(1) of the
Income Tax Act, 1961 (i

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