(i) Lalit Hotels and Resorts Limited is engaged in business of owning, operating and managing hotels during the previous year 2025-26. The tips are…

(i) In respect of tips collected by the company from the guests and distributed to the employees, the person responsible for paying the employee was not the employer at all, but a third person, namely the guest. The payments of collected tips included and paid by way of a credit cards, UPI or Net Banking in the bills by guest, would not be payments made "by or on behalf of" an employer. The contract of employment not being the proximate cause for the receipt of tips by the employee from a guest, such payments would be outside the scope of sections 15 and 17. There is no employer-employee relationship between customers and the employees of Lalit Hotels and Resorts Ltd. and therefore such payments do not fall in the nature of salary. On account of such tips being received from guests and not from the employer, section 192 would not get attracted at all in the hands of Lalit Hotels and Resorts Ltd.⁵ Thus, the company is not responsible for deducting tax at source from disbursement of tips to its employees. (ii) (1) No fresh notice of demand is required to be served on Mr. X. The Assessing Officer is only required to give an intimation of the fact of reduction of demand to ₹ 12 lakhs to Mr. X. The proceedings initiated on the basis of the original notice of demand may be continued in relation to the reduced amount of ₹ 12 lakhs from the stage at which such proceedings stood immediately before disposal of appeal. OR / Alternative Solution: (II) A fresh notice of demand has to be given only in respect of ₹ 5 lakhs, being the amount of enhancement. Any proceedings in relation to ₹ 15 lakhs covered by the original notice of demand served upon Mr. X may be continued from the stage at which such proceedings stood immediately before the disposal of appeal. (iii) As per section 194BA, on any income by way of winnings from any online game during the financial year, tax @ 30% is required to be deducted on the net winnings in the user account. Since there is a withdrawal on 1.2.2026, Live 11 is required to deduct tax at source at the time of such withdrawal on the net winnings comprised in such withdrawal, as well as on the remaining amount of net winnings in the user account at the end of the financial year. Net winnings at the time of first withdrawal during the F.Y. i.e., on 1.2.2026 = ₹ 25,00,000, being amount withdrawn - (₹ 1,00,000, being non-taxable deposit made in the user account + ₹ 10,000, being opening balance) = ₹ 23,90,000. Net winnings at the end of the financial year i.e., on 31.3.2026 = (₹ 25,00,000, being amount withdrawn + ₹ 6,60,000, being closing balance) - (₹ 1,00,000, being non-taxable deposit made in the user account + ₹ 10,000, being opening balance + ₹ 23,90,000, being net winnings comprised in the earlier withdrawal) = ₹ 6,60,000.