Royal Western India Turf Club Limited Vs ITO (ITAT Mumbai)
Stake Money Not Subject to TDS: ITAT Mumbai Deletes ₹12.92 Crore Demand on RWITC, Follows Binding Precedents
The Mumbai ITAT (D-Bench) partly allowed the appeal of Royal Western India Turf Club Ltd. (RWITC) for AY 2018-19 and deleted a massive TDS demand of ₹12.92 crore raised under Sections 201(1) and 201(1A). The Tribunal held that “stake money” paid to horse owners is not liable to TDS either under Section 194B or Section 194BB, reaffirming that stake money is distinct from winnings by punters/bettors. Relying on its own binding decisions in RWITC’s cases for AYs 2012-13 and 2016-17, CBDT Circular No. 240 dated 17.05.1978, and the Karnataka High Court ruling in Bangalore Turf Club Ltd., the ITAT held that amendments to Section 194B do not override the specific exclusion of stake money. The CIT(A)’s refusal to follow earlier ITAT orders merely due to pendency of Revenue’s appeal was disapproved. Consequently, RWITC could not be treated as an “assessee in default” for non-deduction of TDS on stake money, and the tax and interest demands were quashed. However, a small interest component of ₹26,312 relating to delayed deposit of admitted TDS was sustained.
