This is appeal of assessee against order of CIT(A) dt. 30th May, 2005 pertaining to asst. yr. 2000-01. Briefly stated, facts of case are that assessee filed his return of income for year under consideration, which was accepted by Department. Later on, assessee filed application under s. 154 of IT Act for getting order rectified, insofar as taxability of price of Maruti car, which was received as gift from small saving gift scheme of Government. real crux of matter is that assessee himself had shown this car as taxable receipt in return of income for asst. yr. 2000-01, wherein he had declared income from his profession at Rs. 59,000 and price of car at Rs. 1,72,380. While applying for rectification under s. 154, assessee had clarified that by mistake and under wrong guidance, he had shown this receipt as taxable. He had deducted only Rs. 5,000 from price of car as per s. 10(3) of IT Act and declared rest. But later on, he came to know that car received under free gift coupon scheme of Government is not taxable receipt, as lottery, under s. 2(24)(ix) of Act. But learned AO resorted to clarification inserted in above section by Finance Act, 1972 w.e.f. 1st April, 2002, wherein meaning of word lottery has been widened. To above, objection of assessee is that, no matter if this Explanation was even taken to include instant receipt in definition of lottery , above Explanation is not applicable to assessment year under consideration as it became operative only w.e.f. 1st April, 2002 and it has not been given retrospective effect. But, learned AO did not oblige assessee. learned CIT(A) also was of same view as that of learned AO. assessee has taken up this matter further before this Bench. I have heard rival submissions and perused evidence on record. There is no dispute regarding fact that assessee has received this motor car in question as result of winning from small saving gift scheme. It is also undisputed that assessee had deposited small amount in monthly income scheme of small saving deposit with Government of Rajasthan and was given free gift coupon under "Free Gift-coupon scheme No. 25" and was declared winner of gift prize of Maruti car. This fact is also fortified from relevant gift coupon No. C-822048 of Government of Rajasthan (small savings department), which is free gift coupon under "Alp Bachat Uphaar Yojana," copy of which is placed at page No. 1 of paper book. Further, letter dt. 19th Oct., 2000 of additional director, Alp Bachat Nidesalay, copy o f which is placed at page No. 2 of paper book, which clarifies that receipt of prize related to year 1999. newly inserted Explanation, which widens definition of word "lottery", is operative w.e.f. 1st April, 2002. reasoning given by learned AO that this Explanation shall be taken to be available, prior to 1st April, 2002 also, seems to be not correct. In case amendment was intended to have retrospective effect, there was no need to make this provision prospective. Before I conclude that even amended provisions would perhaps not include prize won as result of "small savings scheme by way of free gift coupon , it is pertinent to mention here that such winnings were not made taxable as lotteries under IT Act before this amendment. decision of Hon ble Madras High Court in CIT vs. Dy. Director of Small Savings Department (2004) 187 CTR (Mad) 562: (2004) 266 ITR 27 (Mad) is relevant decision in this regard. Hon ble Judges have held thus: "Before scheme can be regarded as lottery, there must be element o f distribution of prizes which should be by chance or lot and such distribution should be among those who had paid price for participating in scheme. M e r e gratuitous distribution without any price having been paid by participants for acquiring chance and receiving prize that is ultimately distributed would not amount to lottery." Therefore, it is clear from above that under this scheme for getting free coupon, assessee did not pay anything and it was simply given because he had deposited in small saving scheme. incentive was given to induce more and more people to make small savings and that too, in interest of general public. It cannot be said that assessee had paid anything to purchase coupon as is required by Act. Therefore, it can be safely held that on relevant date and during relevant time, such receipt was not at all taxable under IT Act. Therefore, it was bounden duty of learned O to rectify order suo motu and in any case he had to rectify when assessee detected his mistake and applied for rectification. It is true that assessee had already paid taxes but this payment was under wrong information. When assessee makes payment of taxes, which he is not required to, same has to be returned by Department. In amended provisions of s. 2(24)(ix), this Explanation appears to widen scope of expression "lottery" but it takes into its ambit only such competition where people compete for winning of prizes. In this case, assessee has not competed for prize. He simply deposited some amount in small saving scheme and gratuitously received free coupon. He never intended to compete. enlargement of scope of definition of word "lottery" seems to catch recent prizes given in TV programmes and like. Be that as it may, amended provisions do not relate to year under consideration. Therefore, rectification under s. 154 of Act as requested by assessee has to be allowed by learned AO. I, therefore, direct that price of motor car in question has to be excluded from total income of assessee for year under consideration. In result, appeal is allowed. *** NAND LAL SONI v. INCOME TAX OFFICER