BookMyShow Convenience Fee Not Commission Under Section 194H: ITAT Bangalore

Srinivas Rudrappa Vs ITO (ITAT Bangalore)

Summary: ITAT Bangalore disposed of two appeals of the assessee concerning AYs 2013-14 and 2014-15 arising from TDS proceedings relating to convenience fees collected by M/s Bigtree Entertainment Pvt. Ltd. through its BookMyShow online ticketing platform. The assessee, proprietor of Eshwari Cinema and Kamakya Cinema theatres, permitted Bigtree to facilitate online cinema-ticket bookings. Customers paid the ticket price plus a convenience fee ranging from Rs.5 to Rs.25 per ticket.

Bigtree remitted the ticket cost to the cinema owner after deducting TDS while retaining the convenience fee as its revenue. The Assessing Officer treated the retained convenience fee as commission/service charges constructively paid by the assessee to Bigtree and held that tax was deductible under section 194H.

Orders under sections 201(1) and 201(1A) followed. For AY 2013-14, the assessee raised a limitation objection under section 201(3), contending that the order dated 30/03/2021 concerning FY 2012-13 was beyond the permissible period. Relying upon the Coordinate Bench decision in DCIT Vs. M/s Coffee Day Enterprises Ltd., the Tribunal accepted the legal ground, held the Assessing Officer’s order beyond the statutory period and quashed it. On merits for AY 2014-15, the Tribunal examined the arrangement between the assessee and Bigtree and observed that the transaction/convenience fee was borne by the end customer. Bigtree facilitated booking for customers, charged them the fee and remitted the balance to the assessee.