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TMI Blog2024 (1) TMI 913X X X X Extracts X X X X X X X X Extracts X X X X ..... on 194B of the Act, which requires tax to be withheld on the winning amount from any lottery or crossword puzzle, at the time of payment, when the winning amount exceeds Rs. 10,000. From the assessment order, it is difficult to infer whether the AO was satisfied with the assessee s replies furnished from time to time or not. Further, the assessment order also does not indicate that the AO examined/verified the details furnished by the assessee with respect to the deduction of tax as per provisions of section 194B of the Act. Therefore, observations made do not support the plea of the assessee in the facts and circumstances of the present case. Thus we agree with the findings of the learned PCIT, vide impugned order, that the AO has not examined the details furnished by the assessee, and the assessment order needs enquiry on the issue of deduction of TDS under section 194B - Decided against assessee. - Shri Om Prakash Kant, Accountant Member And Shri Sandeep Singh Karhail, Judicial Member For the Assessee : Shri Jeet Kamdar For the Revenue : Shri R.A. Dhyani ORDER PER SANDEEP SINGH KARHAIL, J.M. The present appeal has been filed by the assessee chal ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... passed by the learned AO is erroneous in so far it is prejudicial to the interest of the revenue. In relation to taxes to be withheld on payments made to players on account of Online Promotional Games VI. directing the learned AO to examine the issue on the payments made towards winning of lotteries/Crossword Puzzles on account of Online Promotional Games during the year and further to verify the applicability of withholding provisions. VII. directing the learned AO to examine the said issue by placing incorrect references of absolute numbers pertaining to TDS on winnings and not TDS on online promotional expense, thereby inferring that there was absolutely no application of mind and the order under Section 263 of the Act was passed in haste. VIII. directing the learned AO to examine the issues (despite himself admitting that submissions have been made during the assessment proceedings) merely on account of the discussion on the subject not forming part of the assessment order, without appreciating the fact that mere non-mentioning of specific reasons for accepting explanation of Appellant by the learned AO in assessment order cannot lead to assumption that th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed 31/03/2019 passed under section 263 of the Act, the learned PCIT came to the conclusion that the assessment order is erroneous and prejudicial to the interest of the Revenue on the basis that the AO failed to conduct enquiries and verification as to why the payments made for winning from lotteries/crossword puzzles were not rooted through P L account and as to why TDS was not deducted on the full amount of payment made. Accordingly, the learned PCIT set aside the assessment order with the directions to the AO to pass the assessment order after examining whether the assessee has made any payment towards winning of lotteries or crossword puzzles and on account of online promotional games during the year and, if so, verify whether the assessee has complied with the provisions of Chapter XVII B of the Act. 6. The assessee challenged the aforesaid order passed under section 263 of the Act on the basis that the provisions of section 263 of the Act were invoked on a different ground and the order of revision was passed on an altogether different ground without providing the opportunity for hearing to the assessee. In appeal, the coordinate bench of the Tribunal vide order dated 05/0 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nses, during the assessment proceedings. The learned AR further submitted that in support of its submission, the assessee also furnished the TDS payment challans under section 194B of the Act, during the assessment proceedings. It was submitted that the assessee deducted TDS @ 30% under section 194B of the Act only when the winning amount exceeds Rs. 10,000 and therefore the winning amount has been paid after withholding tax as per the provisions of the Act wherever applicable. It was further submitted that all the details and submissions were filed by the assessee pursuant to directions of the AO, which were duly considered while passing the assessment order. 10. On the contrary, the learned Departmental Representative ( learned DR ) after perusal of the assessment record submitted that all the submissions as furnished by the assessee, which form part of the paper book, are available on record except the submission dated 18/11/2017. The learned DR by vehemently relying upon the impugned order submitted that it is not evident from the assessment order whether the AO has made any verification of the details furnished by the assessee and whether the AO was satisfied with assessee ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to the winner is after reducing the service charge and withholding tax from the total winning amount. The assessee submitted that it deducted tax at source @30% under section 194B of the Act. We find that vide aforesaid written submission, the assessee also made its submissions regarding withholding tax on payments made to Facebook. We further find that the assessee also filed its written submissions on 08/12/2017, 15/12/2070, and 26/12/2017, which forms part of the paper book, providing details pertaining to the winning amount and applicable TDS deduction under section 194B as well as TDS payment challan under section 194B of the Act in cases where the net winnings exceed Rs. 10,000. It is pertinent to note that all these submissions, i.e. dated 08/12/2017, 15/12/2070, and 26/12/2017 were duly received by the office of the AO and the learned DR also confirms that these submissions are available in the assessment record. 13. The AO, vide assessment order dated 29/12/2017, only made disallowance of Rs. 10,46,35,355 under section 40(a)(ia) of the Act in respect of payment made to Facebook, disallowance of Rs. 24,20,753 on account of travelling and conveyance expenses, and disallow ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... written submission dated 18/11/2017 filed by the assessee was part of the assessment record while passing the assessment order, even though, as submitted by the learned DR, now the copy of same is not available on record. Since the order sheet entries after 06/11/2017 are not available in the assessment record, it is difficult to comment on the exact details sought by the AO during the assessment proceedings. However, the learned DR confirmed that the written submissions dated 08/12/2017, 15/12/2070, and 26/12/2017 form part of the assessment record, whereby the assessee filed the details pertaining to the winning amount and applicable TDS under section 194B of the Act. 15. Now the issue arises as to whether these details were examined by the AO while passing the assessment order. This issue also becomes relevant as the learned PCIT alleged that the TDS was not deducted from the full amount of payment made by the assessee. On the contrary, as per the assessee, it has deducted the TDS while making the payment to the winners of the game of Rummy, when the prize money paid was more than Rs. 10,000 as per the provisions of section 194B of the Act. 16. Before proceeding further, i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... an example, in the aforesaid submission, the assessee submitted that if 4 players participate in a game and each of them pays Rs. 25 as the entry fees, then the deduction of TDS @30% and the actual payout to the winner is by way of the following computation:- Sl. No. Particulars Amount (in Rs.) 1. Gross Prize Money 100 2. Service Charge (@ 5% on Total Entry Fees) 5 3. Entry Fees 25 4. Net Prize Money (1-2-3) 70 5. TDS @30% 21 6. Net amount after withholding (4-5) 49 7. Actual Payout (6+3) 74 19. Therefore, in the aforesaid example, as per the assessee, it deducted tax @30% under section 194B of the Act on net prize money of Rs. 70, while the actual payout was Rs. 74. Further, where the wh ..... X X X X Extracts X X X X X X X X Extracts X X X X
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