SPAY TECHNOLOGY PRIVATE LIMITED,NEW DELHI vs. ACIT/DCIT, CENTRAL CIRCLE-25, DELHI, NEW DELHI

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH ‘A’, NEW DELHI BEFORE SH. SATBEER SINGH GODARA, JUDICIAL MEMBER AND SH. NAVEEN CHANDRA, ACCOUNTANT MEMBER ITA No. 8978/Del/2025 (Assessment Year : 2023-24) SPAY Technology Pvt. Ltd. Vs. ACIT/DCIT 2/9, 2nd Floor, West Patel Central Circel – 25 Nagar, New Delhi-110 008 Delhi PAN : ABBCS 1932 N (APPELLANT) (RESPONDENT) Assessee by Shri Lalit Kumar, C.A. and Ms. Neha Gupta, C.A. Revenue by Shri Zafarul Haque Tanweer, CIT-D.R. Date of hearing: 13.08.2026 Date of Pronouncement: 13.08.2026 ORDER PER NAVEEN CHANDRA, ACCOUNTANT MEMBER : This captioned appeal has been filed by the assessee against the order of the learned Commissioner of Income Tax (Appeals)-29, New Delhi [‘CIT(A)’ in short] dated 08.10.2025 arising from the assessment order dated 31.03.2025, passed by the ACIT, Central Circle-25, New Delhi (hereinafter referred to as the "AO") under section 143(3) of the Income Tax Act, 1961 (hereinafter referred to as "the Act") for the Assessment Year 2023-2024.

ITA No. 8978/Del/2025 [A.Y 2023-24] Spay Technology Pvt. Ltd. vs. ACIT/DCIT 2. The grounds raised by the assessee are as under : 1. “That Ld. CIT(A) erred in upholding the mechanical approval u/s 153D of the Income Tаx Act, 1961 granted by range head on the same day as Ld. AO forwarded the draft order and got the approval from range head in few hours only which shows that the impugned Order has been passed in haste without properly involving the approving authority. Further, the approval was granted u/s 153D on the same day without any meaningful scrutiny, demonstrating a lack of application of mind. Therefore, order has been framed with pre-set of mind for making the uncalled addition and such mechanical approval stands invalid, hence order is void-ab-initio. 2. That order of CIT(A) erred in relying upon the findings of investigation wing, mechanically assuming the differences of transactions reflected at SPAY server id and business transaction reflected at SPAY portal without verification. 3. That Ld. CIT(A) erred in treating the difference of transactions as reflected at SPAY server ID and SPAY portal (business transaction) as unverified transaction on assumption basis by ignoring the documentary evidences submitted during the course of assessment proceedings as well as evidences filed in appellate proceedings. Further, Ld. CIT(A) also erred in making addition @ 0.1025% on alleged unverified transaction as net commission income. Therefore, such addition is not sustainable in law. 4. That Ld. CIT(A) also erred in making addition of commission income of Rs.1,30,65,169/- on unverified transactions whereas during the course of appellate proceedings, it was established with the documentary evidence that there is no unverified transaction and all the alleged transactions are duly recorded by the appellant by way of wallet to wallet transfers and credit amount recovered on which commission is not chargeable. However, Ld. CIT(A) failed to understand the industry norms of doing business and treated such transactions as unverified transactions on assumption basis. 5. The appellant craves leave to amend, modify and/or alter grounds and/or to adduce and rely upon such further evidence and/or documents as may be required at any time before and during the time of hearing.”

ITA No. 8978/Del/2025 [A.Y 2023-24] Spay Technology Pvt. Ltd. vs. ACIT/DCIT Retailers (RT). The assessee earns commission only on customer-facing transactions such as money transfer, AEPS and bill payments, which are duly recorded in the SPAY Portal. The assessee e-filed its ITR on 31.10.2023 declaring current year business loss of Rs.10,63,79,200/-. 5. Thereafter, the AO completed the assessment on 31.03.2025 and made addition of Rs. 5,32,15,278/- on account of commission paid to Master Distributor. The AO further added commission income of Rs. 7,64,79,036/- on unverified transactions at rate 0.60% on account of difference in accounts shown at SPAY portal as the business statement and other shown at SPAY server. The AO ultimately assessed the total income of the assessee at Rs.12,96,94,310/-. Upon appeal, the ld. CIT(A) deleted the addition of Rs. 5,32,15,278/- and gave partial relief to the assessee by restricting the rate to @ 0.1025% on unverified transactions and restricted the addition to Rs. 1,30,65,169/-. 6. Now aggrieved assessee is in appeal before us. The learned Counsel for the assessee Shri Lalit Kumar Gupta, CA, stated that there is no difference in in transactions and they are all recorded in books of account. In the alternative, the Ld AR submitted that the rate of commission on unverified transactions be restricted to 0.0325%. 7. Per contra, the ld. DR relied on the orders of the authorities below.

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ITA No. 8978/Del/2025 [A.Y 2023-24] Spay Technology Pvt. Ltd. vs. ACIT/DCIT 8. We have heard the rival submissions and have perused the relevant material on record. In the instant case, we find that the assessee has attempted to prove the entire commission income by stating that there is no unverified transactions as they are internal fund movements and recorded in SPAY Server Ledger. On the other hand, the Revenue’s endeavour to disbelieve the assessee’s contentions cannot be fully justified. Further, the Revenue, adding commission income @ 0.60% on unverified transactions, considering the nature of assessee’s business model, appears to be excessive. In this factual matrix, there is some element of failure to explain some of the transactions, cannot be ruled out. Be that as it may, it is deemed appropriate, in larger interest of justice, the commission rate on the unverified transaction be considered at 0.035% of total transactions of Rs.12,96,94,310/-, would be just and proper with a rider that the same shall not be treated as a precedent, so as to cover all loopholes. The AO is directed to calculate the commission income accordingly and treat the same as business income under the normal provisions of the Act. As such, this part of grounds of appeal is partly allowed.

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ITA No. 8978/Del/2025 [A.Y 2023-24] Spay Technology Pvt. Ltd. vs. ACIT/DCIT 9. In the result, appeal of the assessee in ITA No. 8978/Del/2025 is partly allowed. Order pronounced in the open court on 13.08.2026

Sd/- Sd/- (SATBEER SINGH GODARA) (NAVEEN CHANDRA) JUDICIAL MEMBER ACCOUNTANT MEMBER Date:- 01.09.2026 Priti Yadav, Sr. Ps* Copy forwarded to: 1. Appellant 2. Respondent 3. CIT 4. CIT(Appeals) 5. DR: ITAT ASSISTANT REGISTRAR ITAT NEW DELHI

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