TaxTMI 
TaxTMI 
2026 (7) TMI 285
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....idual filed his return of income (RoI) for AY 2022-23 declaring total income of Rs. 15,62,200/- which consists of income from salary and 'income from other sources'. The case was selected for scrutiny through CASS. During the course of assessment proceedings, the AO noticed that as per information received data pertaining players winnings was obtained during the course of search, u/s. 132 of the Income Tax Act, 1961 (in short "the Act") in the case of M/s. Gameskraft Technology Pvt. Ltd. The assessee has won to the tune of Rs. 3,54,44,447/- from gaming as a prize. The assessee has won to the tune of Rs. 3,54,44,447/- from gaming on portal managed by M/s. Gameskraft Technology Pvt. Ltd. However, it is seen from the RoI filed by the assessee,....
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.... AO disallowed Rs. 5,71,288/- towards deduction claimed under Chapter VI-A and loss claimed from house property and added back to the total income. 4. Aggrieved by the assessment order, the assessee preferred an appeal before the Ld.CIT(A). Before the Ld.CIT(A), the assessee reiterated its submission made before the AO and argued that as per the information provided by the company and considered by the AO, the assessee has incurred loss of Rs. 30,43,537/- which is evident from the total amount of BuyIn and gross winnings from the games. This is further supported by total amount paid by the assessee on various dates and amount withdrawn on various dates, where the company has shown loss of Rs. 30,43,537/-. Although, the information clearl....
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....this Tribunal. 7. The Ld. Counsel for the assessee, Mr. Suresh Velugula, CA, submitted that the Ld.CIT(A) erred in sustaining the addition of Rs. 3,54,44,447/- towards winnings form online games u/s. 115BB of the Act without appreciating the fact that amount considered by the AO represents gross BuyIn reported by the gaming platform and not actual winnings. The Ld. Counsel for the assessee further referring to the information submitted by the company which is available in assessment order submitted that, as per the information, it is clearly shows that the assessee has incurred loss of Rs. 30,43,537/- which is evident from the total BuyIn and gross winnings. The AO without considering the relevant facts has considered the aggregating of ....
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....d.SR-AR for Revenue, on the other hand, supporting the order of the Ld.CIT(A) submitted that as per the information furnished by M/s. Gameskraft Technology Pvt. Ltd., the assessee has gross winnings of Rs. 3,54,44,447/-. As per Sec u/s. 115BB of the Act, which deals with taxation of gross winnings from any game including online games. Section 58(4) of the Act doesn't allow any deduction towards expenditure against winnings from games. The AO after considering relevant facts has rightly taxed gross winnings from online games. The Ld.CIT(A) after considering relevant facts has rightly sustained the additions made by the AO, therefore, he submitted that the additions made by the AO should be deleted. 10. In so far as addition of Rs. 5,71,28....
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.... of transactions of the assessee in two categories, i.e., one under the category calculation of winning/loss [difference between BuyIn & winning] and second category, the total payment and receipts by the assessee. As per calculations of winnings/loss, the company has reported loss of Rs. 30,43,537/-. This has been further reiterated in the category of ledger accounts of the assessee for payment made for the year and amount received for the year which also shows loss incurred for Rs. 30,43,537/-. From the details submitted by the company and considered by the AO, it is abundantly clear that the assessee has incurred loss of Rs. 30,43,537/- for the year under consideration. Although, the information is very clear that the assessee has incurr....
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....innings, then he should have obtained information from the company with regard to winnings/loss if any for the year under consideration. But, the AO has not obtained any information from the company and blindly made addition by taking into account gross winnings without considering the initial amount paid by the assessee. Therefore, we are of the considered view that, the AO is erred in making addition of Rs. 3,54,44,447/- towards gross winnings form online games u/s. 115BB of the Act. The Ld.CIT(A) without considering relevant facts, simply sustained the additions made by the AO. Therefore, we set aside the order of the Ld.CIT(A) and direct the AO to delete the addition of Rs. 3,54,44,447/- made u/s. 115BB of the Act. 12. Coming back to....