R.S. MONGIA, CJ.— This judgment and order of ours will dispose of Writ Appeal Nos. 232/99 and 242/99 as the same arise out of the common judgment and order of the learned Single Judge dated 12.3.99 allowing two writ petitions Civil Rule No. 2786/94 and No. 405/94 2. A common question of law and fact arises in both these appeals the question of law that calls for our determination is Lotteries to the organizing agent of the prize money from the unsold tickets of lotteries and unclaimed prizes attracts the provisions of Section 194B of the Income Tax Act, 1961? 3. The aforesaid question of law has arisen in the following facts and circumstances: Two orders dated 25.01.94 and 06.06.94 were passed by the Assistant Commissioner, Income Tax, Circle-TDS, Panbazar, Guwahati under Section 201 (1) of the Income Tax Act, 1961 (hereinafter called 'the Act'). By the order dated 25.1.94 the Assistant Commissioner, Income Tax, Circle-TDS, had asked the Director, State Lotteries, Assam to deposit a sum of Rs. 2,80,16,800/- within 3 (three) days from the date of the said notice of demand as the Director, State Lotteries, Assam had failed to deduct tax at source in respect of lottery draws held during the period 16.11.93 to 31.12.93. Similarly, vide order dated 6.6.94 the Assistant Commissioner of Income Tax had raised a demand of Rs. 7,92,06,400/- against the Director, State Lotteries, Assam on alleged short deduction of tax at source under Section 194 B of the Act in respect of 1494 Nos. Lottery Draws held during the period from 6.12.92 to 12.12.92. The aforesaid two orders dated 25.1.94 and 6.6.94 were made subject matter of challenge in Civil Rule No. 405/94 and No. 2786/94 respectively. 4. Pursuant to the powers conferred on the State under Article 298 of the Constitution of India the State of Assam has been carrying on the business of State organized lotteries through its organizing agents after executing an agreement between the parties, i.e. the Director of State Lotteries and the Agent. Lotteries are run under various names. The Director of Lotteries in this case, appointed M/s. M S Associates as organizing agent. The Director of Lotteries was responsible for making the payment of the prize money to the prize winners in terms of the agreement made with the organizing agent. Lotteries are run under various names. The Director of Lotteries in this case, appointed M/s. M S Associates as organizing agent. The Director of Lotteries was responsible for making the payment of the prize money to the prize winners in terms of the agreement made with the organizing agent. As per the agreement dated 2.12.91, as amended vide agreement dated 7.8.92, the organizing agent was to pay certain royalty to the Director of Lotteries, but the sale of tickets was to be done by the agent. The agent was required to keep a deposit of Rs. 10 lakhs with the Director of Lotteries as one time deposit of taxable prize money. The taxable prize money was to be distributed or disbursed by the Director of Lotteries to the prize winner of the lottery and that sum was to be deducted from the deposit made by the agent. The prizes in each draw which were not claimed by the prize winners within 30 days from the date of publication of the result in the official gazette, were not to be disbursed. However, the Government could allow disbursement of such prizes within 90 days from the date of draw subject to the provisions in the Assam State Lotteries Rules, 1969, as amended from time to time. Further, the organizing agent was to be solely responsible for sale of entire lot of tickets for each draw and the Director of State Lotteries was not liable for any loss caused to the organizing agent on account of lottery tickets remaining unsold. Clause (5), Clause (10) and Clause (15) of the agreement dated 2.12.91 as substituted by the agreement dated 7.8.92 read as follows: "5. The Organizing Agent shall pay a fixed Royalty, to the Government, a sum of Rs. 10,500.00 (Rupees ten thousand five hundred) only per draw each for daily and weekly lotteries and Rs. 12,000/- (Rupees twelve thousand) only per draw for each Bumper Draw, or Annual fixed Royalty for 1460 draws in a year shall be Rs. 1,53,30,000 (Rupees one crore fifty three lakhs thirty thousand) only which shall be payable as guaranteed Royalty to the Government of Assam by the Organizing Agent. 12,000/- (Rupees twelve thousand) only per draw for each Bumper Draw, or Annual fixed Royalty for 1460 draws in a year shall be Rs. 1,53,30,000 (Rupees one crore fifty three lakhs thirty thousand) only which shall be payable as guaranteed Royalty to the Government of Assam by the Organizing Agent. However, the Organizing Agent shall try his best to achieve maximum number of Daily, Weekly and Bumper draws as per annum as stated in clause 4 above so that Government of Assam may be benefited of haying more Royalty than the Annual Fixed Royalty. In case or more draws than the minimum prescribed above, the organizing agent shall pay the same fixed Royalty of Rs. 10,500/- per draw for each excess draw (i.e. more than the minimum draw 1460 per annum) held in a year. The fixed royalty amount shall be paid within 15 days of the draw held provided that when the organizing agent fails to pay any instalments during the stipulated limit they shall be liable to pay interest @ 6% per annum for each day of default subject to a maximum of 180 days and thereafter 12% per annum for each day of default" 10. Organizing Agent shall retain with the Govt. a deposit of Rs. 10.00 lakh (Rupees ten lakhs) only as one time deposit of taxable prize money for ten daily and weekly lotteries excluding Bumper Lotteries to cover upto maximum number of draws to be run by Organizing Agent. This deposit shall remain with the Govt. until the same is claimed by the prize winners. In case the taxable prizes are not claimed by the public or are among the unsold tickets of the organizing Agent, the same deposit with the Government shall be carried over to the next draws as prize money deposit with the Government. Whenever any prize money is claimed by the public from the Government the Government shall inform the same to the Organizing Agent for its reimbursement to the extent of such claim to the Govt. and the organizing agent shall pay the same (prize money) within three days of intimation to the Organizing Agent its authorised local agent by the Director of State Lotteries. All prize from unsold tickets of the lotteries shall be the property of the Organizing Agent. and the organizing agent shall pay the same (prize money) within three days of intimation to the Organizing Agent its authorised local agent by the Director of State Lotteries. All prize from unsold tickets of the lotteries shall be the property of the Organizing Agent. Similarly, all unclaimed prizes shall also be property of the organizing agent and shall be refunded to the Organizing Agent. 15. The organizing agent shall provide to the Govt. with the Bank guarantee of the Schedule Bank for a sum of Rs. 25.00 Lakhs (Rupees twentyfive lakhs) only to cover the period of Agreement towards securing the prize money and Royalty and which shall be liable to be forfeited by the Govt. in case of breach of agreement." 5. In these cases, as observed above, the Agent was given refund by the Director of Lotteries, inasmuch as, the prize winner(s) never came forward to claim the prize or the prize winning ticket(s) had remained unsold and remained with the Agent. At this stage, the provisions of Section 194B of the Act may be noticed - "194B. Winning from Lottery or cross puzzle - The person responsible for paying to any person any income by way of winnings from any lottery or crossword puzzle in an amount exceeding five thousand rupees shall, at the time of payment thereof, deduct income-tax thereon at the rates in force; Provided that no deduction shall be made under this Section from any payment made before the 1st day of June, 1972." 6. The term "income" has been defined under Section 2(24) of the Income Tax Act. Sub-clause (ix) of Section 2(24) of the Act was inserted by the Finance Act, 1972 which brought winning from the lotteries within the purview of the Act. Sub-clause (ix) of Section 2(24) of the Act reads as under - (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." 7. Sub-clause (ix) of Section 2(24) of the Act reads as under - (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." 7. Before the learned Single Judge the case of the Director of Lotteries was that there is no sale of the lottery tickets to the agent and further the refund of the prize money from unsold tickets as also the refund of the unclaimed prizes to the organizing agent is not given by way of winning from any lottery and, therefore, Section 194B of the Act (supra) is not attracted. However, the case of the revenue was that sale is involved when the agent gets tickets from the Director of Lotteries and all tickets, whether sold or unsold by the agent, participate in the lottery and the refund of prize money towards unsold ticket(s) in the hand of the agent or refund of unclaimed prizes by any winner of the holder of lottery ticket(s) is the property of the agent and such the refund to the agent amounts to income by way of winning from a lottery and, therefore, the Director of Lotteries was required to deduct Income Tax therefrom at the rate in force at the relevant time under Section 194B of the Act. Learned Single Judge after detailed discussion held that the agreement between the Director of Lotteries and the agent was a mere agency for organizing lottery. There was no sale of the lottery tickets involved by the Director of Lotteries to the Agent and the money which was refunded to the Agent in case of prize winning ticket remaining unsold in his hand or the prize winner not coming forward to claim prize within the stipulated period, does not attract the provision of Section 194B of the Act as the refund was not winning from the lottery. Learned Single Judge relied on the judgment of the Bombay High Court as well as of Apex Court in coming to the aforesaid conclusion. In view of the above^ the learned Single Judge allowed the writ petitions and quashed the impugned orders. The revenue has come up in the present appeals. 8. Before proceeding further, let us first analyse Section 194B of the Act. In view of the above^ the learned Single Judge allowed the writ petitions and quashed the impugned orders. The revenue has come up in the present appeals. 8. Before proceeding further, let us first analyse Section 194B of the Act. The said Section envisages that deduction of tax has to be made by the person responsible for paving to any person any income by way of winning from any lottery (emphasis supplied). For the application of Section 194 B of the Act, the sine qua non is that the payment by the person has to be towards winning from any lottery. Section 2(24) (ix) which lays down any winning from lottery to be income for the purposes of Income tax, further goes to show that the income as envisaged under Section 194B which is paid by the Director of Lotteries is to be as winning from the lotteries and not otherwise. In these backdrop let us examine the arguments of the learned counsel for the parties. 9. Learned counsel for the appellant (Revenue) urged that as per Clause (10) of the agreement (which has been reproduced above) all prize from unsold tickets of the lotteries shall be the property of the Organizing Agent. Similarly, all unclaimed prizes shall also be property of the organizing agent and shall be refunded to the Organizing Agent. From this, the learned counsel argued that what is refunded to the agent is the prize money and, therefore, it is an income from the winning from lottery which would attract the provisions of Section 194B of the Act. Further, it was argued that the unsold tickets in the hand of the Agent also participate in the lottery and if any one of those tickets win a prize the money that is received by the Agent would be considered as income by way of winning from a lottery attracting the provisions of Section 194B of the Act. 10. On the other hand, learned counsel for the respondents (writ petitioner and the Agent) argued that no sale of tickets is involved between the Director of Lotteries and the Agent. The agreement between the parties only creates agency and no sale is involved. 10. On the other hand, learned counsel for the respondents (writ petitioner and the Agent) argued that no sale of tickets is involved between the Director of Lotteries and the Agent. The agreement between the parties only creates agency and no sale is involved. The unsold tickets in the hands of the agent really do not win the prize and if a prize winner to whom the ticket might have been sold does not come to claim the prize within the stipulated period, the refund of that amount to the agent does not amount to payment towards winning from any lottery. 11. After hearing the learned counsel for the parties we are of the view that there is no force in these appeals. Our analysis of Section 194B (supra) would clearly indicate that the person responsible for payment under Section 194B is only to make deduction if he is paying the money as an income by way of winning from any lottery and not otherwise. Supposing in a case an agent sells a ticket which wins prize. The prize winner does not come forward to claim prize within the stipulated period. As per the agreement that money has to be refunded by the Director of Lotteries to the Agent (see Clause (10) of the Agreement.). Surely, when the agent gets refund, he is not getting the refund as income by way of winning from a lottery ticket, inasmuch as, the winner was somebody else who did not come forward to claim the prize. The Agent does not become a prize winner from a lottery when the real prize winner does not come forward to claim the prize. In these circumstances the question of attracting the provision of Section 194B would not arise. 12; Now, take for instance a ticket which wins the prize remains unsold and is in the hands of the agent. In such an eventuality also, according to us, the unsold ticket in the hands of the agent cannot be said to be winner of the lottery, inasmuch as, firstly the agent did not purchase the ticket from the Director of Lotteries and secondly the unsold tickets in the hands of the agent stricto senso do not participate in the lottery. In such an eventuality also, according to us, the unsold ticket in the hands of the agent cannot be said to be winner of the lottery, inasmuch as, firstly the agent did not purchase the ticket from the Director of Lotteries and secondly the unsold tickets in the hands of the agent stricto senso do not participate in the lottery. If this was not so, then the agent might as well go to the Director of Lotteries after the stipulated period for claiming the prize lapses and tell him since nobody has come to claim the prize he should be refunded the money, though, he himself may be holding the ticket which may have won the prize. The intention behind Section 194B is that the person must receive the money as winner of lottery. Learned Single Judge in paragraph 28 of the judgment has observed as follows: "28. In view of the above discussions, I hold that the income accrued to an agent/trader/stockiest in respect of price on unsold/ unclaimed tickets in the possession of an organizing Agent is income from business and not constitute winning from lotteries, and, therefore, it cannot be brought within the meaning of Section 2(24)(ix) of the Act." 13. We are endorsing the view of the learned. Single Judge that the refund may be an income accrued to an agent in respect of prize on unsold/unclaimed prizes, but it does not constitute income from the lottery as envisaged by Section 2(24)(ix) of the Act to attract the provisions of Section 194Bof the Act. 14. Clause 24 of the Agreement dated 12.01.91 is in the following terms - "24. The Organizing agent shall be solely responsible for the sale of the entire lot of tickets printed for such draw. The Director of State Lotteries shall not be liable for any loss caused to the organizing agent on account of lottery tickets remaining unsold." 15. From the above, it will be apparent that the organizing agent is solely responsible for the sale of tickets. In other words, the tickets are not sold by the Director of Lotteries either to organise any agent or the third party. From the above, it will be apparent that the organizing agent is solely responsible for the sale of tickets. In other words, the tickets are not sold by the Director of Lotteries either to organise any agent or the third party. The agent under the agency is only required to lotteries on behalf of the State Government and therefore the agent does not become the purchaser of the ticket and it cannot be said that the unsold tickets in the hands of the agent are participating in the lottery. As per the agreement the State Government is entitled to a fixed amount of money as royalty from the agent. The Bombay High Court in Commercial Corporation of India Ltd. Vs. Income Tax Officer and others, reported in 201 ITR 348, while dealing with almost similar agreement came to the conclusion that the agreement of agency where the State or the principal and the person to whom right to organise lottery was given was an agent. No transaction of sale could be read into agreement. The Bombay High Court further held as under- "We have already seen, having regard to the definition of lottery, that it is chance for a prize. Therefore, there must be consideration paid for taking a chance. The company does not purchase any lottery tickets. Therefore, they do not take any chance at the draw. The company also does not equally participate in the draw. It is, therefore, not possible to held that when the ex-officio Director of Lotteries credits the amount under the second part of clause 15 of the agreement, the Government given prizes to be petitioner-company for unsold tickets...." 16. For the foregoing reasons, we find no infirmity in the judgment of the learned Single Judge. We find no merit in these appeals which are hereby dismissed.