VIMAL GOSWAMI,SURAT vs. ITO, WARD 2(3)(4), SURAT

IN THE INCOME TAX APPELLATE TRIBUNAL SURAT BENCH, SURAT Before: Shri T. R. Senthil Kumar, Judicial Member & Shri Ratnesh Nandan Sahay, Accountant Member

ITA No: 1353/SRT/2025 Assessment Year: 2017-18

Vimal Goswami, Vs I.T.O., Shop No. 1, Charbhuja Ward 2(3)(4), Mobile, Althan Road, Bhatar Surat. Shiddhi Sheri, Surat- 395017 (Gujarat) PAN: AQZPG 8728 L (Appellant) (Respondent)

Assessee Represented by : Shri Mehul Shah, C.A. Revenue Represented by : Ms. Neerja Sharma Sr.DR. Date of hearing : 05/05/2026 Date of pronouncement : 27/07/2026 आदेश/ORDER PER: RATNESH NANDAN SAHAY, AM: 1. This is an appeal filed by the assessee against the order of the National Faceless Appeal Centre (NFAC), Delhi [In short, ‘the ld. CIT(A)’] dated 16/10/2025 for the assessment year (AY) 2017-18 wherein the assessee has raised following grounds of appeal: "1. On the facts and circumstances of the case as well as law on the subject, the learned CIT(A) has erred in confirming the action of assessing officer in making addition of Rs.56,02,300/- on account of unexplained money u/s.69A of the I.T Act. 2. On the facts and circumstances of the case as well as law on the subject, the learned CIT(A) has erred in confirming the action of

2 ITA No. 1353/Srt/2025 Vimal Goswami Vs ITO assessing officer in making addition of Rs.7,80,343/- оп estimate basis @ 8 percent on total credits of Rs. 97,54,282/-. 3. On the facts and circumstances of the case as well as law on the subject, the learned assessing officer has erred in taxing the addition by taking the rate @77.25% by attracting S. 115BBE instead of taxing as per normal tax slab. 4. On the facts and circumstances of the case as well as law on the subject, the assessing officer has erred in taxing the income u/s 115BBE @ 77.25% in a retroactive manner by applying the duly substituted S.115BBE inserted retrospectively instead of taxing it at 35.54% as per the old provisions of S. 115BBE. 5. It is therefore prayed that the above additions made by the assessing officer and confirmed by the learned CIT(A) may please be deleted. 6. Appellant craves leave to add, alter or delete any ground(s) either before or in the course of hearing of the appeal." 2. Facts of the case, in brief, are that during the assessment year under consideration, the Assessing Officer found that the assessee had made cash deposits in his bank account alongwith several other credit entries. Thus the assessee was asked to furnish the source of cash deposits and credit entries. In response to that the assessee stated that he had deposited money in Oxigen Wallet and thereafter, transferred the amount to customer's respective account from Oxigen wallet and also provided the list of the customers. The assessee has stated to have deposited SBN after 08/11/2016 and claiming it as receipt from customers which has been transferred through paytam (Oxigen Wallet). The Assessing Officer, however, did not accept the explanation offered by the assessee and treated a sum of ₹ 56,02,300/- as unexplained cash deposits and added the same

3 ITA No. 1353/Srt/2025 Vimal Goswami Vs ITO under Section 69A of the Income Tax Act, 1961 (in short, the Act) and taxed the same @ 60% under Section 115BBE of the Act. Further the Assessing Officer also added a sum of ₹ 7,80,343/- to the total income of the assessee on the ground that the assessee has failed to submit any documentary evidence to substantiate the money transferred from assessee's own account. 3. Aggrieved by the order of the Assessing Officer, the assessee preferred appeal before the ld. CIT(A), who vide the impugned order dated 16/10/2025, confirmed the additions made by the Assessing Officer on the ground that the assessee has failed to establish the genuineness of the transactions so far as the cash deposits are concerned. On the issue of other credit entries made in the bank account, again failed to substantiate the credit available in his bank account and confirmed the addition made by the Assessing Officer that the Assessing Officer has rightly determined the income @ 8%. 4. Further aggrieved by the order of the ld. CIT(A), the assessee is in appeal before this Tribunal. 5. During the appellate proceedings before us, the appellant's counsel has submitted as under: "1. Before the Honourable Tribunal, the contention of the assessee is that that the Return of Income filed by the assessee clearly

4 ITA No. 1353/Srt/2025 Vimal Goswami Vs ITO reflects the actual profit earned by the assessee during the year under consideration. The assessee in his ITR has already considered the total credits of bank account of Rs. 1,53,56,572/- wherein the assessee has offered income to the tune of Rs. 2,47,670/- on the total turnover of Rs. 17,28,500/- earned from business of mobiles trading and accessories. Further, with regard to remaining credits of Rs. 1,36,28,072/- (Rs. 1,53,56,572/- minus Rs. 17,28,500/-), it is submitted that the same represents the amount credited on account of agency business of money transfer on which the assessee has already offered the commission income of Rs. 66,233/-. Hence, no further addition is warranted in the case of the assessee. 2. Further, it is submitted that the business of the assessee is undisputed and the same is evident from Registration Certificate of Establishment in the name of Charbuja Mobiles and Money Transfer which also clearly mentions the nature of business of the assessee that is Mobile Shop and Money transfer. The same forms part of the Paperbook at Sr. 17. The name and address of business is matching with the bank account. Further, it is submitted that the assessee has also filed the Google-My-Business page during the course of hearing which shows the photos, reviews and address of the shop which is matching with the address in Registration certificate and bank account. 3. Further, with regards for remaining credits apart from mobile trading, it is submitted that the assessee works as an authorised agent of money transfer wherein cash collection and wallet transfer is core function. The assessee was associated mainly with Oxigen Wallet Services which had an extensive retail network of over 200.000/-retail touch points across India. Oxigen Wallet is India's first virtual mobile wallet approved by

5 ITA No. 1353/Srt/2025 Vimal Goswami Vs ITO RBI. Oxigen Services India Pvt. Ltd. operated as an RBI- authorised Semi-Closed Prepaid Payment Instrument (PPI) issuer under the Payment and Settlement Systems Act, 2007. 4. It is pertinent to note that UPI itself was in its nascent stage in 2016 with negligible adoption and UPI became upstream only post-2018 due to no transaction charges associated with UPI And hence, after the advent of UPI, Oxigen Wallet was shut down. However, during the year under consideration i.e. 2016- 17, irrespective of demonetisation, Oxigen Wallet was still the most appropriate digital payment mechanism for wage disbursement to labourers, for a large majority of whom did not possess bank accounts or have banks at remote/native place and it should be appreciated that the assessee has utilised the same exactly for this intended purpose because during demonetisation, workers class faced a lot of problems. On perusal of the bank statements placed at Pg. 60 and 61 of the Paper Book, it is clearly evident that the cash deposits amounting to Rs. 56,02,300/- were immediately transferred to Oxigen Services India Pvt. Ltd. (principal) from agent, which is also substantiated by the narration appearing in the bank account and on which assessee has only received commission income. ……………………………………………………………………………… ……………………………………………………………………………… 5. Thus, it is contended that the assessee has not created any unaccounted asset or made any unaccounted investment out of the said cash deposits. It is well settled principle that money. received as an agent for onward transmission on behalf of principal is not income of agent Even before demonetisation and after demonetisation assessee worked as an agent for money. transfer for companies like Paytm, Oxigen Services etc which is

6 ITA No. 1353/Srt/2025 Vimal Goswami Vs ITO evident from Form 26AS of AY 2016-17 and 2018-19. This explains the cash deposits during demonetisation as well as other credits during the period other than demonetisation. Hence, no addition is warranted in the case of the assessee. 6. In fact the assessee, submitted the full KYC details of workers who are the ultimate beneficiary which includes Aadhar Card and Phone No. of the labourers and the Assessing Officer chose not to conduct any further inquiry regarding the same but still proceeded to make additions without any rebuttal to the contention of the assessee. The relevant extract is reproduced below:

7 ITA No. 1353/Srt/2025 Vimal Goswami Vs ITO [ITA No.902/SRT/2024] dated 17.02.2026 involving the same principal Oxigen Services India Pvt. Ltd. wherein the Bench has given its findings while stating that the assessee had handled total remittances of about Rs. 4,43,82,551/- on behalf of Oxigen Services India Pvt. Ltd. and had earned a very small commission income of Rs. 1,97,477/- which was accepted as the only taxable income. Despite such huge turnover through bank accounts, the Tribunal categorically held that the entire receipts could not be treated as income since the assessee was merely acting as an agent. 8. Even if we juxtapose the figure of commission earned vis-à-vis credit receipts in banks of the above case with the assessee, the proportionate cash/credits in respect of commission of Rs. 66,233/- offered by the assessee would come to Rs. 1,48,85,731/- [66,233*4,43,82,551/1,97,477] which clearly establishes the bona fides of the assessee and reinforces that the income declared is fair, reasonable, and in line with industry practice of money transfer agency business and explains the total remaining credits in bank of Rs. 1,36,28,072/- apart from the turnover from the business of trading of mobile. 9. Without prejudice to the above submission, if any addition is sustained it should be made to the tune of 30% as held by the Madras High Court in the case of S.M.I.L.E Microfinance Limited vs. ACIT-W.P. (MD) No. 2078 of 2020 (Madras HC)." The appellant's counsel also placed reliance on the orders of the ITAT, Surat Bench in the case of ITO Vs Umesh Bhagubhai Patel in ITA No. 902/Srt/2024 order dated 17/02/2026 and

8 ITA No. 1353/Srt/2025 Vimal Goswami Vs ITO Bhanushankar Kasalshibhai Dave Vs ITO ITA No. 927/Srt/2025 order dated 23/01/2026. 6. On the other hand, the ld. Sr.DR vehemently supported the orders of the lower authorities. 7. We have carefully considered the facts of the case, rival submissions of the parties and the decisions of the Coordinate Bench of Surat Tribunal in the case of ITO Vs Umesh Bhagubhai Patel and Bhanushankar Kasalshibhai Dave (supra) and we find that this case is squarely covered by these two decisions of the Coordinate Bench of this Tribunal. Thus, respectfully following the same, we also hold that the appellant is an agent and only gets a small commission and therefore, entire receipts cannot be added in the hands of the appellant. Now coming to the exact addition, the appellant himself has cited the decision of the Hon'ble Madras High Court in the case of S.M.I.L.E. Microfinance Ltd. (supra) wherein the Hon'ble High Court has held that addition, if any, is made it should be made to the tune of 30% of the total receipts. Accordingly, 30% of Rs. 56,02,300/- which comes to Rs. 16,80,690/- which is sustained and rest of the addition is deleted.

9 ITA No. 1353/Srt/2025 Vimal Goswami Vs ITO 8. In the result, this appeal of the assessee is partly allowed. Order is pronounced under the provisions of Rule 34 of IT(AT) Rules, 1963 on 27/07/2026.

Sd/- Sd/- (T. R. SENTHIL KUMAR) (RATNESH NANDAN SAHAY) JUDICIAL MEMBER ACCOUNTANT MEMBER Surat Dated 27/07/2026 *Ranjan आदेश�ȧĤǓ�ͧ �ͪ �\ Ē ȯͪ��/ Copy of Order Forwarded to:- 1. Assessee 2. Revenue 3. Concerned CIT 4. CIT (A) 5. DR, ITAT 6. Guard file. By order/आदेशसे,

उप/सहायकपंजीकार आयकर\ �Ȣ�ȣ�\ͬ ����, सूरत