Tds 194b

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Amit Nandy (Querist)
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02 January 2015
If a company have arranging a lottery where the customers of the company only the participants and for the participation the customers have not paid any participation fees. One car has been offered as prize for the winner of the lottery . In that context my specific query as there is no participation fees is involved the TDS u/s 194B is applicable.

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Amit Nandy

Kapil Kaushik

Kapil Kaushik (Expert)
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03 January 2015 On the prima-facie analysis of the case, it seems that the TDS u/s 194B should be applicable. However, you should refer to the following cases which defined the word lottery:

Sampanna Kuries (P.) Ltd. v. ITO [2004] 141 Taxman 615 (Ker.) the essential elements
of ‘lottery’ were discussed and the following was held:

i) A prize or some advantage in the nature of a prize;

ii) Distribution thereof by chance; and

iii) Consideration paid or promised for purchasing the chance.

Since in this case there is no consideration involved in participation, the case is not related to lottery payment.

You may also want to refer: Canaan Kuries & Loans (P.) Ltd. v. Income-tax Officer [2005] 142 TAXMAN249

Mr Rahul Ramesh has also posted his views on the same matter on this forum, you might want to see that as well:

https://www.caclubindia.com/articles/section-194b-7636.asp#.VKd-VfmSxH8

My personal opinion is that as per the relevant case laws, the details which you have mentioned cannot be deemed as lottery.

Regards
Kapil Kaushik