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Facts
The assessee declared a total income of Rs. 9,58,020 for AY 2022-23. The Assessing Officer (AO) noticed gross winnings of Rs. 99,25,011 from a gaming portal and added the entire sum to the assessee's income, disallowing any losses. The CIT(A) confirmed this addition ex-parte.
Held
The Tribunal found that the lower authorities had relied solely on the gaming portal's account statement without properly examining the assessee's alleged losses or the specific nature of online gaming. In the interest of natural justice, the Tribunal decided to provide the assessee with another opportunity.
Key Issues
Whether the AO correctly taxed the gross winnings from online gaming without considering the 'buy-in' amounts and related expenses, and whether losses from gaming should be allowed against winnings.
Sections Cited
250
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Income Tax Appellate Tribunal, A BENCH: CHENNAI
Before: SHRI GEORGE GEORGE KAND MS. PADMAVATHY.S
आदेश / O R D E R
PER PADMAVATHY.S, A.M: This appeal by the assessee is against the order of the Commissioner of Income Tax (Appeals)/National Faceless Appeal Centre (NFAC), Delhi, (in short "CIT(A)") passed u/s. 250 of the Income Tax Act, 1961 (in short "the Act") dated 30.10.2025 for Assessment Year (AY) 2022-23.
The assessee is an individual and filed the return of income for AY 2022-23 on 28.07.2022 declaring total income of Rs.9,58,020/-. The case was selected for scrutiny and the statutory notices were duly served on the Angappan Rama Shankar :- 2 -: assessee. The AO noticed that during the year under consideration the assessee had gross winnings of Rs.99,25,011 from the gaming portal run by M/s.Gameskraft Technologies P Ltd. The assessee submitted that he has incurred a loss from gaming and submitted a statement showing the loss as below:
Based on the report from investigation on the search operation conducted at M/s.Gameskraft Technologies P Ltd., the AO held that the gross winnings should be brought to tax. The AO further held that no loss shall be allowed against winning from lotteries and accordingly added the entire gross receipts as income of the assessee. Aggrieved, the assessee filed further appeal before the CIT(A). Since the assessee did not appear before the CIT(A), the addition was confirmed by the CIT(A) on merits after considering the materials available on record. The assessee is in appeal before the Tribunal against the order of the CIT(A).
We heard the parties and perused the material on record. The primary submission of the Ld. AR is that the AO is not correct in adding the gross winnings without considering the "buy-in" amounts and related expenditure. On perusal of the order of the order of the CIT(A) we notice that the order has Angappan Rama Shankar :- 3 -: been passed exparte though the CIT(A) has considered the materials available on record to dismiss the appeal. It is the plea of the Ld. AR that the lower authorities have merely gone by what is mention in the account statement of the assessee as received from M/s.Gameskraft Technologies P. Ltd without providing an opportunity to the assessee to rebut. It is also submitted that the statement considered contains the assessee loss incurred by the assessee which has been completely ignored and only the gross winning from the statement is taken as the income of the assessee. Considering that the lower authorities has passed the order based on the account statement of the assessee received from M/s.Gameskraft Technologies P. Ltd, without examining any other facts unique to online gaming we are of considered we that the assessee should be given one more opportunity to represent the case properly in the interest of natural justice and fair play. Accordingly we remit the appeal back to the AO for a fresh consideration of the impugned issue by calling for necessary details pertaining to the actual winning earned by the assessee from online gaming and decide the issue in accordance with law. The assessee is directed to file the necessary details without seeking unnecessary adjournments and cooperate with assessment proceedings. It is ordered accordingly.