Srither Vs CIT (ITAT Chennai)
Gaming Wallet Turnover Is Not a Jackpot—Only Real Net Winnings, Not Recycled Credits, Taxable u/s 115BB: Chennai ITAT
The Chennai ITAT has held that, even before the introduction of ss.115BBJ & 194BA, only real net winnings from online games could be taxed u/s 115BB. The cumulative credits appearing in an online gaming wallet cannot be treated as income without considering the corresponding buy-ins, repeated circulation of funds & redeployment of earlier winnings in subsequent games.
Where the gaming platform’s own statement established that the assessee’s total buy-ins exceeded his gross winnings, there was no real income liable to tax. The Tribunal therefore deleted an addition of ₹2,44,50,134.
Facts of the Case
The assessee, an individual, filed his original return for AY 2022-23 declaring income of ₹12,80,020. He subsequently filed a revised return declaring income of ₹7,74,220.
The case was selected for scrutiny after the AO received information that the assessee had won approximately ₹2.44 crore through online games operated by Gameskraft Technologies Pvt. Ltd. but had not disclosed the amount in his return.
The assessee explained that the figure represented cumulative winning entries in his gaming account & not his real income. According to the statement furnished by Gameskraft, his gross winnings were ₹2,44,50,134, whereas his total buy-ins were ₹2,74,96,660. The overall gaming activity therefore resulted in a net loss of ₹30,56,491.
