DCIT Vs Play Games 24×7 Private Limited (ITAT Mumbai)
Player’s Wallet Is Not a Single Winning, and a Referral Bonus Is Not a Prize: ITAT Deletes Gaming Platform’s TDS Disallowances
Case Details
The four appeals covered player winnings, promotional bonuses, sponsored prizes, CSR donations and employee stock option expenditure. The largest question was whether separate gaming payouts could be aggregated in a player’s wallet to trigger tax deduction under section 194B as it stood in the years before the Tribunal.
AY 2015–16: ₹273.43 Crore Disallowance of Player Payouts
For Assessment Year 2015–16, the Assessing Officer disallowed ₹273,43,53,943 under section 40(a)(ia) for alleged failure to deduct tax under section 194B. The company argued that the then applicable ₹10,000 threshold had to be tested against each payment of winnings, rather than by adding all amounts won by a player during the year.
The Tribunal followed its earlier decision in the company’s own case for Assessment Year 2017–18. Under the section 194B wording relevant to these years, the obligation arose at the time of payment of an amount exceeding ₹10,000. That wording did not require separate payments to be aggregated across the financial year. The fact that amounts accumulated in an electronic wallet did not, by itself, turn them into one payment above the threshold.
