JUDGMENT Srinivasa Iyengar, J.—The Income Tax Appellate Tribunal, Bangalore Bench, Bangalore, has referred the following question for the opinion of this court : "Whether, on the facts and in the circumstances of the case, the Tribunal is right in holding that the sum of Rs. 3,27,111 representing the net race winnings on jackpot tickets is exempt under section 10(3) of the Income Tax Act, 1961 ?" 2. The matter relates to the assessment for the assessment year 1971-72, previous year being the one ended March 31, 1971. The assessee is a partner of a firm which is engaged in the business of book-makers in connection which horse racing. He returned an income of Rs. 38,197 being his share of income from the said firm. In Part IV of his return, he had shown a sum of Rs. 3,27,111 for the relevant year as representing net race amount on the ground that it was a casual and non-recurring receipt coming within the purview of s. 10(3) of the I.T. Act, 1961 (hereinafter referred to as "the Act"). The ITO accepted the claim of the assessee and concluded the assessment. 3. The Commissioner, however, was of the opinion that as the assessee was a partner in a firm engaged in the business of book-making, the receipts from jackpot winning has to be considered as receipts arising from business or occupation and could not, therefore, be exempted from payment of tax. Accordingly, he issued a notice under s. 263 of the Act to the assessee to show cause why the said receipts should not be brought to tax. It was contended on behalf of the assessee that he being a partner in a book-making firm had nothing to do with the betting in the races selected for the jackpot and his association as a book-maker had no relevance to the winning from the jackpot event and that activity was nothing but a gambling event and the amount was not taxable. The Commissioner, however, did not agree with the contention of the assessee. He was of the opinion that receipt or earning of the assessee from a jackpot event was as a result of organised effort with a pre-calculated design, expectation and permutation acquired as a result of his continued participation in almost all the race events as he was a book-make. He was of the opinion that receipt or earning of the assessee from a jackpot event was as a result of organised effort with a pre-calculated design, expectation and permutation acquired as a result of his continued participation in almost all the race events as he was a book-make. He accordingly directed the ITO to revise the assessment and bring the amount to tax. The assessee preferred an appeal to the Tribunal. The Judicial Member accepted the contention on behalf of the assessee as correct but the Accountant Member differed from him. Consequently, the matter was referred to the third Member. The Vice-President of the Tribunal heard the matter and he agreed with the view expressed by the Judicial Member and accordingly, by a majority decision, the contention of the assessee has accepted. At the instance of the Commissioner, the question has been referred to this court. 4. By an amendment made by the Finance Act, 1972, the defination of "income" was amend by insertion of Sub-clause (ix) under s. 2(24) of the Act, which is as follows : "(ix) any winnings from lotteries, crossword puzzles, races including horse races, card games and other games of any sort or from gambling or betting of any form or nature whatsoever." 5. As a sequel to this, an amendment was introduced to s. 10(3)(ii) of the Act also. Earlier to the amendment, the sub-section opened with the words "any receipts which are of a casual and non-recurring nature unless they are..." By virtue of the amendment, the main part of the sub-section reads as follows : "any receipts which are of a casual and non-recurring nature, not being winnings from lotteries, to the extent such receipts do not exceed one thousand rupees in the aggregate." 6. Section 74A makes provision that in regard to losses arising out of receipts from lotteries crossword puzzles, races including horse races, card games, other games of any sort, gambling or betting of any form, that is, in respect of items included in the defination of "income" such losses shall not be set off except against income, if any, from other sources, under that head. The owner of a race horse was, however, permitted to carry forward the loss and set off against the profit derived from such activities in the subsequent year and the set-off would be only for a period of four years. 7. The owner of a race horse was, however, permitted to carry forward the loss and set off against the profit derived from such activities in the subsequent year and the set-off would be only for a period of four years. 7. Section 194B make provision for deduction of tax at source by a person responsible for paying to any person any income by way of winnings from any lottery or crossword puzzle of an amount exceeding one thousand rupees. A further provision was introduced in regard to deduction of tax at source in respect of winnings in horse races with effort from April 1, 1978. 8. Section 80TT makes provision for deduction in respect of winning from lottery and winnings to the extent of Rs. 5,000 were not liable to tax and if the winnings exceeded Rs. 5,000 fifty per cent. of the excess over Rs. 5,000 was entitled to be deducted in the computation of total income of the assessee. These provisions, prima facie, indicate that prior to the specific amendment made in the defination of "income", these categories of receipts were not liable to Income Tax. 9. The Judicial Member held that the act of the assessee in buying the jackpot tickets to do with his activity as a book-maker in the firm and that the buying of jackpot tickets was not incidental to the carrying on of his business as a book-maker. He was also of the opinion that the receipts were casual and non-recurring and that they could not be said to be receipts arising from business or the exercise of a profession or occupation. He expressed himself thus : the two are entirely unconnected activities viz., book-making by the assessee while purchasing a single jackpot ticket is a gamble, a filing by the assessee as by lakhs putters. 10. The Accountant Member, however, was persuaded to hold the contrary on the basis that the assessee being a partner of a firm of book-maker and constantly participating in the races had acquired special knowledge or skill and the activity of buying a jackpot tickets was in anticipation of a win and by predicting the winning horse on the basis of special knowledge acquired in carrying on his profession as a book-maker. He also observed that the burden was on the assessee to prove that he came within the exception provided under s. 10(3) of the Act and he had not placed sufficient material in that behalf. The Vice-President who gave his opinion consequent on the difference of opinion between the activities of the assessee in purchasing jackpot tickets and his association with the firm as a book-maker. The Accountant Member had made a calculation in regard to the possibilities of a win. The Vice-President expressed himself that the possibilities were so slender and the having regard to several instances, where even as a book-maker the firm had lost, came to the conclusion that it was not possible that due to the assessee's experience and knowledge as book-maker he had been winning the jackpot more than once. He expressed himself that it was just a case of the assessee being smiled upon by dame fortune and that his knowledge and experience as a book-maker were not the contributory cause for his success. He held that the mere fact that the assessee had indulged in betting in jackpot pool more than once could convert the activity into vocation and that betting by itself was not a business or profession. He also observed that the activities of the assessee could not be termed as an organised commercial activity amounting to vocation or occupation. 11. It is clear from the facts on record that buying of the jackpot tickets and the winnings in respect of some of them was personal to the assessee. The business of a book-maker is to accept bets from punters and set different odds in respect of the bet. Buying of tickets in respect of the races or buying tickets in regard to jackpot pool is not a necessary or incidental activity of the business of a book-maker. It was not the case of the department that the winning were part of the receipts of the firm. It cannot, therefore, be said that this is an activity of the assessee in the character of a book-maker. There was no material justifying the treatment of this activity as part and parcel of the business of the firm of the assessee ticket was just as a book-maker. It cannot, therefore, be said that this is an activity of the assessee in the character of a book-maker. There was no material justifying the treatment of this activity as part and parcel of the business of the firm of the assessee ticket was just as a book-maker. His position in buying the winning selected by the club and in respect of such races selected, the winner has to be guessed and tickets bought accordingly. The existence of the gambling element is glaring. The winning being predominantly a matter of chance is patent and, therefore, it cannot at all be said that any skill is involved. If such a win can be predicted by the use of skill it would not be a case of gambling and the result would be predictable, which circumstances is absent in the instant activity. By the mere fact that the assessee was lucky in winning the jackpot more than once, it does not mean that the activity was a vocation or occupation. In the order of the Tribunal certain observations of Rowalt J. in Graham v. Green [1925] 9 TC 309 (KB) have been quoted and in our opinion they are apposite. The learned judge said) p. 312) : "What is a bet ? A bet is merely an irrational agreement that one person should pay another person something on the happening of an event. A agrees to pay B something if C's horse runs quicker than C's or if a coin comes one side up rather the other side up. There is no relevance at all between the event and the acquisition of property. The event does not really produce it at all. It rests, as I say, on a mere irrational agreement." 12. The receipts were in consequence of the bets offered by the assessee and cannot be placed on any other footing as being receipts arising out of any business or occupation. The requirements of s. 10(3) of the Act were clearly satisfied by the assessee and the receipts were not taxable. 13. Accordingly, the question is answered in the affirmative and in favour of the assessee.