TaxTMI 
TaxTMI 
TaxTMI 
2017 (4) TMI 1515
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.... petition. All parties were heard. I have carefully perused by records. It is contention of the petitioner that- On 09.03.2017, he registered himself on the said website by using his email id. after being satisfied with the claim of the Respondent Company on their website that their operations were legitimate not amounting to gambling under the Public Gambling Act, 1867. On 10.03.2017, the petitioner transferred by his credit card an amount of Rs. 50,000/- in his own account opened on the said website for participating in the various leagues created on the said website. The petitioner created a virtual team for the cricket match between Ireland and Afghanistan as illustrated and instructed on the said website, by himself choosing 11 players, out of total players, who were to play for Ireland and Afghanistan collectively. After forming a virtual team of 11 players as per his own selection, the Petitioner joined various leagues and from the available deposit of Rs. 50,000/- he used Rs. 24,000/- approx. for playing in the leagues. The petitioner submits that at the end of the match, he lost Rs. 24,000/-, the entire money, which he had betted on his virtual team while playing in the va....
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.... Tax Authorities, with whom they are being assessed since more than 5 years. These Statutory Authorities have not found anything amiss in their business model of providing services. They not only remit service tax and income tax as applicable to them, but also deduct and remit applicable withholding tax on user winnings to the competent authority. Their partners include reputed financial institutions, payment gateway service providers, websites and social media portals, website/hosting services providers and other service providers, which engagement reflects their standing and reputation. What is a fantasy sports game: b) Any fantasy sports game offered by them is a game which occurs over a predetermined number of rounds (which may extend from a single match / sporting event to an entire league or series) in which participating users select, build and act as managers of their virtual teams (constituted of real players or teams) that complete against virtual teams of other users, with results tabulated on the basis of statistics, scores, achievements and results generated by the real individual sportspersons or teams in certain designated professional sporting events. The winner o....
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....additional points), strike rate, number of catches and stumpings (for a wicket keeper), and in the current or previous series), economy rate, five wicket hauls. Such evaluation by the user is based on a wealth of statistics from past matches from which to evaluate future performances, but these need to be analysed in light of factors such as age, statistical trends, current form, injuries, the athlete's statistics in particular stadia and against particular opponents, and other material causative factors that will have a bearing on the athlete's performance. Users must also follow the news to acquaint themselves with selection decisions as they are permitted to change their team up to sixty minutes prior to the commencement of a match, before the squads are announced at the toss. g) Furthermore, users have to select one player from amongst their virtual team selection as a 'captain' and another player as the 'vice- captain', with the points accumulated by the designated captain doubled, and the points accumulated by the designated 'vide-captain' multiplied by 1.5, and added to the overall points-tally of such user's virtual team. Therefore, sel....
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....antasy sports games provides a user with greater insight into strategies for success and a better understanding of the game's dynamics and operational constraints, and in itself heightens and attunes the element and exhibition of skill on the user's part and thereby has an material influence on generating a successful winning outcome in favour of the user. It is in recognition of the material influence that training and experience in the Dream11 fantasy sports games has on user success that Dream11 offers free-to-play variants of its fantasy sports games to users and thereby offers users an opportunity test their skills against other participating users, familiarize themselves with the Dream11 rules and points attribution methodology, understand and gain experience in participating in the Dream11 game and devise their participation strategy on the basis of such training and experience, at no cost or charge to users. Training to exercise knowledge, judgment and skill: k) Alongside providing users with the opportunity to participate in free-to-play fantasy sports games, Dream11 also provides users with How-to-Play and Frequently Asked Questions pages and operates the Guru s....
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....ellation policy, as set out in the Dream11 Terms and conditions, Dream11 refunds the entire entry-fees and and administrative fees and administrative fees paid by a user in case of an Abandonment or Cancellation of the sports event in respect of which the fantasy sports game is offered. This policy is exemplified in the transaction history of the petitioner's account with Dream11, where all amounts paid by the petitioner towards participation in fantasy cricket games offered in relation to the South African Domestic T20 cricket match between the Dolphins and Warriors were refunded and credited back into his user account on the abandonment of the cricket match. p) On the above basis, the Respondent Company refuted the claim of the Petitioner that the fantasy sports games offered by Dream11 constitute gambling. Mandatory agreement and acceptance of contractual terms and conditions by user: q) With respect to the fantasy sports games offered by Dream11 through the Platform, and in relation to each user's interaction with the Platform, Dream11 has published a detailed set of terms and conditions to govern the user's account and interaction with the Platform and the serv....
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....ether provisional prevention of the Public Gambling Act, 1867 (hereinafter referred to as 1867 Act) are applicable or not; or any direction to set the case in motion are granted. For the sake of brevity, provisions of Sections 11 and 12 of 1867 Act, read as under:- 11.Witnesses indemnified.-Any person who shall have been concerned in gaming contrary to this Act, and who shall be examined as a witness before a Magistrate on the trial of any person for a breach of any of the provisions of this Act relating, to gaming, and who, upon such examination, shall in the opinion of the Magistrate make true and faithful discovery, to the best of his knowledge, of all things as to which he shall be so examined, shall thereupon receive from the said Magistrate a certificate in writing to that effect, and shall be freed from all prosecutions under this Act for anything done before that time in respect of such gaming. 12. Act not to apply to certain games Nothing in the foregoing provisions of this Act contained shall be held to apply to any game of mere skill wherever played. The aforementioned Act, has been extended to the State of Punjab, Haryana and Union Territory by way of the Public Gambli....
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....sertable enactment, it must fail in its entirety in respect of both classes of competitions. Mr Seervai who appeared for the respondent, disputes the correctness of these contentions. He argues that Rs.prize competition' as defined in S.2 (d) of the Act, properly construed, means and includes only competitions in which success does not depend to any substantial degree on skill and are essentially gambling in their character; that gambling activities are not trade or business within the meaning of that expression in Art. 19(1) (g), and that accordingly the petitioners are not entitled to invoke the protection of Art. 19(6); and that even if the definition of 'prize competition' in S.2(d) is wide enough to include competitions in which success depends to a substantial degree on skill and Ss. 4 and 5 of the Act and Br. 11 and 12 are to be struck down in respect of such competitions as unreasonable restrictions not protected by Art. 19 (6), that would not affect the validity of the enactment as regards the competitions which are in the nature of gambling, the Act being severable in its application to such competitions." The learned Judge thereafter observed as under:- "We m....
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....49 of the Police Act and Section 11 of the Gaming Act specifically provide that the penal provisions of the two Acts shall not apply to the games of "mere skill wherever played". The expression "game of mere skill" has been interpreted by this Court to mean "mainly and preponderantly a game of skill". In State of Andhra Pradesh vs. K. Satyanarayana & Ors. (1968) 2 SCR 387, the question before this Court was whether the game of Rummy was a game of mere skill or a game of chance. The said question was to be answered on the interpretation of Section 14 of the Hyderabad Gambling Act (2 of 1305 F) which was pari materia to Section 49 of the Police Act and Section 11 of the Gaming Act. This Court referred to the proceedings before the courts below in the following words: "The learned Magistrate who tried the case was of the opinion that the offence was proved, because of the presumption since it was not successfully repelled on behalf of the present respondents. In the order making the reference the learned Sessions Judge made two points: He first referred to s.14 of the Act which provides that nothing done under the Act shall apply to any game of mere skill wherever played and he was ....
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....ecisions, that the result of a horse race on which bets are placed is not based on pure chance. A considerable degree of skill goes into the operation. It starts from the breeding and training of the race horse on which much talent, time and money are expended by trained persons, jockeys have also to be specially trained and equipped. The horses themselves are not necessarily consistent in fitness, which is the reason why horses are exercised openly and watched carefully by representatives of the Press and their observations widely published. Thus, the inherent capacity of the animal, the capability of the jockey, the form and fitness of the horse, the weights carried and the distance of the race at the time of the race are all objective facts capable of assessment by race goers. Thus the prediction of the result of the race is not like drawing 2 aces in a game of poker. Rather, it is the result of much knowledge, study and observation..... Horse racing has been universally recognised as a sport. Horsemanship involves considerable skill, technique and knowledge and jockeys have to be specially trained over a period of years. Whether a particular horse wins at the race or not, is no....
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.... not won more than a certain amount were entered......" "All horse racing on the flat except quarter- horse racing involves Thoroughbred (q.v) horses. Thoroughbreds evolved from a mixture of Arab, Turk and Barb horses with native English stock Private studbooks existed from the early 17th century, but they were not invariably reliable. In 1791 Whether by published An Introduction to a General Stud Book, the pedigrees being based on earlier Racing Calendars and Sales papers. After a few years of revision, it was updated annually. All Thoroughbreds are said to descend from three "Oriental" stallions (the Darley Arabian, the Godolphin Barb, and the Byerly Turk, all brought to Great Britain, 1690-1730) and from 43 "royal" mares (those imported by Charles II). The predominance of English racing and hence of the General Stud Book from 1791 provided a standard........" "A race horse achieves peak ability at age five, but the classic age of three years and the escalating size of purses, breeding fees, and sale prices made for fewer races with horses beyond the age of four......." "Over the centuries the guiding principle for breeding thoroughbreds has been, as expressed by an old cli....
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....words, the Hon'ble Supreme Court has held that :- i) the competitions where success depends upon the substantial degree of skill are not gambling; and ii) despite there being an element of chance, if a game is preponderantly a game of skill it would nevertheless be a game of mere skill. It has been found that horse racing like foot racing, boat racing, football and baseball is a game of skill and judgment and not a game of chance. The aforementioned finding squarely applies to the present case. Even from the submissions and contentions of respondent-company and factual position admitted in writ petition, I am of the view that playing of fantacy game by any participant user involves virtual team by him which would certainly requires a considerable skill, judgment and discretion. The participant has to assess the relative worth of each athlete/sportsperson as against all athlete/sportspersons available for selection. He is required to study the rules and regulations of strength of athlete or player and weakness also. The several factors as indicated above submitted by the respondent company would definitely affect the result of the game. Admittedly, the petitioner himself creat....