BookMyShow Convenience Fee Not Subject to Section 194H TDS: ITAT Bangalore

Shanthala Enterprises Vs ITO (ITAT Bangalore)

Summary: ITAT Bangalore allowed the appeal of Shanthala Enterprises for AY 2018-19 and held that the dispute concerning TDS on convenience charges retained by Bigtree Entertainment Pvt. Ltd., operating an online ticket-booking platform, was squarely covered by the Coordinate Bench decision in Shri Srinivas Rudrappa vs. ITO. The assessee operated Veeresh Cinemas in Bangalore.

Following a survey conducted on 30/10/2019 at Bigtree’s premises, the Department found that customers booking cinema tickets online paid the ticket price along with a transaction fee of Rs. 5 to 25/-. Bigtree subsequently remitted the ticket cost together with Rs. 3 to 5/- as the assessee’s share of the transaction fee, based on invoices raised biweekly by the assessee. The Assessing Officer considered the convenience charges retained by Bigtree as attracting TDS and consequently treated the assessee as being in default under sections 201(1) and 201(1A).

The assessee relied on the Coordinate Bench ruling in Shri Srinivas Rudrappa vs. ITO, ITA Nos. 702 & 703/Bang/2022 dated 02/12/2022. In that decision, the Tribunal had held that transaction charges, service charges or convenience fees collected and retained by Bigtree from end users represented consideration for services provided to those end users and did not establish that Bigtree acted on behalf of theatre owners; consequently, section 194H was not applicable in such circumstances.