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“accommodation entry”

Cash Credits & Unexplained ItemsSection 68Section 684,509 judgments

The decision most relied on for accommodation entry is Sumati Dayal v. CIT (214 ITR 801), cited in 1,967 judgments on BharatTax.

Leading authorities on accommodation entry

Sumati Dayal v. CIT
214 ITR 801 · 1995 · Supreme Court
1,967
citing judgments

The Revenue is entitled to look behind the apparent form of a transaction to discover its true nature, applying the test of human probabilities and surrounding circumstances. If transactions defy logic or are unnatural, they can be treated as bogus, even if supported by some documentation, especially in cases of cash credits or unexplained investments.

McDowell & Co. Ltd. v. CTO
154 ITR 148 · 1985 · Supreme Court
741
citing judgments

The Supreme Court held that while legitimate tax planning is permissible, transactions structured as a "colourable device" or "subterfuge" solely to avoid tax are impermissible. It mandates a judicial shift to look beyond the form to the substance of a transaction, allowing the lifting of the corporate veil in tax evasion arrangements.

CIT v. Bholanath Poly Fab. Pvt. Ltd.
355 ITR 290 · 2013 · High Court
712
citing judgments

If an assessee makes purchases from bogus parties, but the underlying goods are genuinely acquired and sold, only the profit margin embedded in such purchases, and not the entire value of the bogus purchases, should be added to the assessee's income.

(Central)-1 v. NRA Iron & Steel (P) Ltd.
103 Taxmann.com 48 · 2019 · Supreme Court
696
citing judgments

When assessing cash credits, share capital, or loans, the assessee bears the onus to prove the identity, creditworthiness, and genuineness of transactions. This burden is not discharged merely by documentary evidence if field inquiries reveal accommodation entries or dealings with paper/shell companies.

Commissioner of Income Tax v. Nova Promoters and Finlease (P) Ltd.
342 ITR 169 · 2012 · High Court
658
citing judgments

To make an addition under Section 68 for unexplained cash credits, the Assessing Officer must conduct proper inquiry into the identity, genuineness, and creditworthiness of the creditor, especially concerning share application money. The assessee's initial discharge of burden by providing necessary details shifts the onus back to the AO for further investigation, including the source of source.

CIT v. Nikunj Exim Enterprises Pvt. Ltd.
372 ITR 619 · 2015 · High Court
391
citing judgments

Transactions defying human probability cannot be applied to isolated purchases if sales are accepted as genuine, and purchases cannot be disallowed without considering the entire transaction and documentary evidence. Failure to produce parties in an assessment proceeding may not be fatal to the assessee.

PCIT v. RMG Polyvinyl (I) Ltd.
396 ITR 5 · 2017 · High Court
272
citing judgments

Reassessment based solely on information from the Investigation Wing, without the Assessing Officer conducting further inquiry or demonstrating an independent application of mind, is unjustified and invalid.

N.K. Proteins Ltd. v. DCIT
84 Taxmann.com 195 · 2017 · Supreme Court
204
citing judgments

When purchases are found to be entirely bogus and based on fictitious invoices from non-existent or unconfirmed suppliers, the entire amount of such purchases is liable to be added back as unexplained expenditure, not merely a percentage thereof.

Judgments citing accommodation entry

Harsha Rajesh Jhaveri, Ahmedabad vs. The DCIT, Cent. Cir. 1(1), Ahmedabad

In the result, the appeal filed by the assesee is hereby allowed

ITA 439/AHD/2023[2012-13]Status: DisposedITAT Ahmedabad10 Jun 2024AY 2012-13

Bench: Shri Waseem Ahmed & Ms Madhumita Roy

For Appellant: Shri Deepak R Shah, ARFor Respondent: Shri Atul Pandey, Sr.DR
Section 68

found that the parties/companies from whom the assessee has shown receipt of Rs. 1.76 crore are the companies controlled and managed by the accommodation entry provider namely Shri Shrish Chandrakant Shah. The AO in alleging so referred the statement of several persons including the certain directors of these companies recorded ... Jhaveri Group. Further as a result of search, it was found that Shri Shrish Chandrakant Shah in association with various intermediaries has been providing accommodation entries in the form of share capital & premium, unsecured loan, LTCG and STCL etc. and one such intermediaries was Shri Rajesh Jhaveri through whom accommodation

Vicky Rajesh Jhaveri, Ahmedabad vs. The DCIT, Cent. Cir. 1(1), Ahmedabad

In the result, the appeal of the assessee is allowed

ITA 428/AHD/2023[2012-13]Status: DisposedITAT Ahmedabad10 Jun 2024AY 2012-13

Bench: Shri Waseem Ahmed & Ms. Madhumita Roy

For Appellant: Shri Deepak R Shah, A.RFor Respondent: Shri Atul Pandey, C.I.T DR
Section 132(4)

dated 9th April 2013. There were found various documents of incriminating nature marked as “cash sheet and cheque sheet” containing the information about the accommodation entries provided by SCS to various parties. SCS used to provide accommodation entries through various intermediaries. He was maintaining 212 companies which were utilised ... cash and cheque sheets were containing the information of the intermediaries who were engaged in introducing the clients to SCS for providing the accommodation entries to the parties. 3.1 The statements under section 132(4) /133A of the Act of SCS and his employees were recorded wherein they admitted having

Vicky Rajesh Jhaveri, Ahmedabad vs. The DCIT, Cent. Cir. 1(1), Ahmedabad

In the result, the appeal of the assessee is allowed

ITA 427/AHD/2023[2011-12]Status: DisposedITAT Ahmedabad10 Jun 2024AY 2011-12

Bench: Shri Waseem Ahmed & Ms. Madhumita Roy

For Appellant: Shri Deepak R Shah, A.RFor Respondent: Shri Atul Pandey, C.I.T DR
Section 132(4)

dated 9th April 2013. There were found various documents of incriminating nature marked as “cash sheet and cheque sheet” containing the information about the accommodation entries provided by SCS to various parties. SCS used to provide accommodation entries through various intermediaries. He was maintaining 212 companies which were utilised ... cash and cheque sheets were containing the information of the intermediaries who were engaged in introducing the clients to SCS for providing the accommodation entries to the parties. 3.1 The statements under section 132(4) /133A of the Act of SCS and his employees were recorded wherein they admitted having

Vicky Rajesh Jhaveri, Ahmedabad vs. The DCIT, Cent. Cir. 1(1), Ahmedabad

In the result, the appeal of the assessee is allowed

ITA 426/AHD/2023[2010-11]Status: DisposedITAT Ahmedabad10 Jun 2024AY 2010-11

Bench: Shri Waseem Ahmed & Ms. Madhumita Roy

For Appellant: Shri Deepak R Shah, A.RFor Respondent: Shri Atul Pandey, C.I.T DR
Section 132(4)

dated 9th April 2013. There were found various documents of incriminating nature marked as “cash sheet and cheque sheet” containing the information about the accommodation entries provided by SCS to various parties. SCS used to provide accommodation entries through various intermediaries. He was maintaining 212 companies which were utilised ... cash and cheque sheets were containing the information of the intermediaries who were engaged in introducing the clients to SCS for providing the accommodation entries to the parties. 3.1 The statements under section 132(4) /133A of the Act of SCS and his employees were recorded wherein they admitted having

Sagar Rajesh Jhaveri, Ahmedabad vs. The DCIT, Cent. Cir. 1(1), Ahmedabad

In the result, the appeal of the assessee is allowed

ITA 425/AHD/2023[2012-13]Status: DisposedITAT Ahmedabad10 Jun 2024AY 2012-13

Bench: Shri Waseem Ahmed & Ms. Madhumita Roy

For Appellant: Shri Deepak R Shah, A.RFor Respondent: Shri Atul Pandey, C.I.T DR
Section 132(4)

dated 9th April 2013. There were found various documents of incriminating nature marked as “cash sheet and cheque sheet” containing the information about the accommodation entries provided by SCS to various parties. SCS used to provide accommodation entries through various intermediaries. He was maintaining 212 companies which were utilised ... cash and cheque sheets were containing the information of the intermediaries who were engaged in introducing the clients to SCS for providing the accommodation entries to the parties. 3.1 The statements under section 132(4) /133A of the Act of SCS and his employees were recorded wherein they admitted having

Sagar Rajesh Jhaveri, Ahmedabad vs. The DCIT, Cent. Cir. 1(1), Ahmedabad

In the result, the appeal of the assessee is allowed

ITA 424/AHD/2023[2011-12]Status: DisposedITAT Ahmedabad10 Jun 2024AY 2011-12

Bench: Shri Waseem Ahmed & Ms. Madhumita Roy

For Appellant: Shri Deepak R Shah, A.RFor Respondent: Shri Atul Pandey, C.I.T DR
Section 132(4)

dated 9th April 2013. There were found various documents of incriminating nature marked as “cash sheet and cheque sheet” containing the information about the accommodation entries provided by SCS to various parties. SCS used to provide accommodation entries through various intermediaries. He was maintaining 212 companies which were utilised ... cash and cheque sheets were containing the information of the intermediaries who were engaged in introducing the clients to SCS for providing the accommodation entries to the parties. 3.1 The statements under section 132(4) /133A of the Act of SCS and his employees were recorded wherein they admitted having

Sagar Rajesh Jhaveri, Ahmedabad vs. The DCIT, Cent. Cir. 1(1), Ahmedabad

In the result, the appeal of the assessee is allowed

ITA 423/AHD/2023[2010-11]Status: DisposedITAT Ahmedabad10 Jun 2024AY 2010-11

Bench: Shri Waseem Ahmed & Ms. Madhumita Roy

For Appellant: Shri Deepak R Shah, A.RFor Respondent: Shri Atul Pandey, C.I.T DR
Section 132(4)

dated 9th April 2013. There were found various documents of incriminating nature marked as “cash sheet and cheque sheet” containing the information about the accommodation entries provided by SCS to various parties. SCS used to provide accommodation entries through various intermediaries. He was maintaining 212 companies which were utilised ... cash and cheque sheets were containing the information of the intermediaries who were engaged in introducing the clients to SCS for providing the accommodation entries to the parties. 3.1 The statements under section 132(4) /133A of the Act of SCS and his employees were recorded wherein they admitted having

The DCIT, Central Circle-1(2), Ahmedabad vs. M/S. Volga International Ltd., Sarangpur

In the result appeal of the revenue is hereby dismissed

ITA 1538/AHD/2017[2010-11]Status: DisposedITAT Ahmedabad10 Jun 2024AY 2010-11

Bench: Shri Waseem Ahmed & Ms Madhumita Roy

For Appellant: Shri Deepak R Shah, ARFor Respondent: Shri Atul Pandey, Sr.DR
Section 68

Venture India Ltd). 6. The AO found that the M/s Prraneta Industries Ltd (hereinafter M/s PIL) is a company controlled and managed by the accommodation entry provider namely A.Y. 2010-11 3 Shri Shrish Chandrakant Shah. The AO in alleging so referred to the statement of several person recorded during ... namely Smt. Jayoti Dhiresh Munevar and Shri Jils Raichand Madan. In the statement, it was admitted that PIL is engaged in providing accommodation entry. Further, because of search, it was found that Shri Shrish Chandrakant Shah in association with various intermediaries has been providing accommodation entries in the form

Harisons Steel Limited, Wada Thane vs. Dy CIT 12(2)(2), Mumbai

In the result, the appeal of the assessee vide ITA No

ITA 3957/MUM/2023[2013-14]Status: DisposedITAT Mumbai10 Jun 2024AY 2013-14

Bench: Shri Amarjit Singh & Shri Sandeep Singh Karhail

For Appellant: Mani JainFor Respondent: Biswanath Das
Section 143(3)Section 147Section 148

availed of cenvat credit. He stated that the purchases recorded in the books of the assesse were not its actual purchases and same were accommodation entries for inflating its purchases and in such bargain the assessee had obtained cenvat credit which would not have been available from the S.S. Scrap ... rebut the circumstantial evidence which considered along with the conduct of the assessee has led to the inescapable conclusion that the assessee had taken accommodation entries and alleged purchases were not genuine. The Hon'ble Gujarat High Court in the cases of M/s. Sanjay Oil Cake Industries

Harisons Steel Ltd, Wada Thane vs. DCIT 12(2)(2), Mumbai

In the result, the appeal of the assessee vide ITA No

ITA 3943/MUM/2023[AY 2011-12]Status: DisposedITAT Mumbai10 Jun 2024

Bench: Shri Amarjit Singh & Shri Sandeep Singh Karhail

For Appellant: Mani JainFor Respondent: Biswanath Das
Section 143(3)Section 147Section 148

availed of cenvat credit. He stated that the purchases recorded in the books of the assesse were not its actual purchases and same were accommodation entries for inflating its purchases and in such bargain the assessee had obtained cenvat credit which would not have been available from the S.S. Scrap ... rebut the circumstantial evidence which considered along with the conduct of the assessee has led to the inescapable conclusion that the assessee had taken accommodation entries and alleged purchases were not genuine. The Hon'ble Gujarat High Court in the cases of M/s. Sanjay Oil Cake Industries

Dharmendra Jayantilal Shah, Mumbai vs. ACIT-31(1), Mumbai

In the result, both the appeals of the assessee are allowed

ITA 3897/MUM/2023[2013-14]Status: DisposedITAT Mumbai10 Jun 2024AY 2013-14

Bench: Shri Narender Kumar Choudhry, Judicialmember & Shri Girish Agrawal

For Appellant: Shri Rajkumar Singh, ARFor Respondent: Smt. Mahita Nair,Sr. DR
Section 10(38)Section 143(3)Section 147Section 148Section 68

which the assessee dealt for their financial health, investigation in the case of operators, cash trails, SEBI reports and their findings qua the accommodation entry providers. Ld. Assessing Officer also issued notices u/s.133(6) to the purchasers of the shares sold by the assessee, referred to as ‘exit providers’ which ... devises. He further observes that there may be absence of direct evidence that cash was AYs 2013-14 & 2014-15 introduced for obtaining the accommodation entry but circumstantial evidence is the evidence of various facts, if taken together, they may form a chain of circumstances leading to an inference

Dharmendra Jayantilal Shah, Mumbai vs. ACIT-31(1), Mumbai

In the result, both the appeals of the assessee are allowed

ITA 3879/MUM/2023[2014-15]Status: DisposedITAT Mumbai10 Jun 2024AY 2014-15

Bench: Shri Narender Kumar Choudhry, Judicialmember & Shri Girish Agrawal

For Appellant: Shri Rajkumar Singh, ARFor Respondent: Smt. Mahita Nair,Sr. DR
Section 10(38)Section 143(3)Section 147Section 148Section 68

which the assessee dealt for their financial health, investigation in the case of operators, cash trails, SEBI reports and their findings qua the accommodation entry providers. Ld. Assessing Officer also issued notices u/s.133(6) to the purchasers of the shares sold by the assessee, referred to as ‘exit providers’ which ... devises. He further observes that there may be absence of direct evidence that cash was AYs 2013-14 & 2014-15 introduced for obtaining the accommodation entry but circumstantial evidence is the evidence of various facts, if taken together, they may form a chain of circumstances leading to an inference

Iilm Education Trust, Gurgaon vs. DCIT (Exemptions Circle 2), Chandigarh

In the result, the appeal of the assessee is allowed for

ITA 227/CHANDI/2023[2014-15]Status: DisposedITAT Chandigarh07 Jun 2024AY 2014-15

Bench: SHRI A.D.JAIN (Vice President), SHRI KRINWANT SAHAY (Accountant Member)

For Appellant: Shri Rohit Jain, Advocate &For Respondent: Shri Rohit Sharma, CIT DR
Section 11Section 12A

disallowance of Rs.72,00,000 being rent paid by the appellant to Kulwant Rai Trust alleging the same to be in the nature of accommodation entry. 5.1 That the C1T(A) erred on facts and in law in not appreciating that the merely because the land underneath the leased building

DCIT CC-3(2), Mumbai, Air India Building vs. Arun Jain, Mumbai

In the result, the appeal by the Revenue is dismissed

ITA 2731/MUM/2023[2021-22]Status: DisposedITAT Mumbai07 Jun 2024AY 2021-22

Bench: Shri Narendra Kumar Billaiya & Shri Sandeep Singh Karhail

For Appellant: Shri Jay BhansaliFor Respondent: Shri Sunny Kachhwaha
Section 142(1)Section 143(2)Section 143(3)Section 250Section 69A

bogus purchases, without considering the statement recorded from key persons who have confirmed that the purchases in question are in the nature of accommodation entry.” 3. The issue arising ground no. 1, raised by Revenue, pertains to deletion of addition made u/s 69A of the Act on account of sales ... recorded during the search and survey action conducted in the year 2017 & 2018 held that the assessee is in the practice of procuring accommodation entries for the inflated purchases shown by it. It was further held that from the facts unearthed, it came to fore that the assessee has created

Rahul Chandrakant Jhaveri, Mumbai vs. DCIT, Central Circle 8(2), Mumbai

In the result, the appeal is partly allowed in above terms

ITA 4509/MUM/2023[2014-15]Status: DisposedITAT Mumbai05 Jun 2024AY 2014-15
Section 132Section 142(1)Section 144Section 153ASection 250

Rahul Chandrakant Jhaveri wherein learned CIT(A) has upheld the addition of assessee’s operational income of Rs. 16,74,53,674/- for providing accommodation entries. 2.The brief facts related to the appeal state that an information was received from GST authorities, that “One World Group” along with other companies/firms ... being 5% of Rs 3,34,90,73,484/- i.e. aggregate of sales and purchases as per the Profit and Loss Account as accommodation entries without considering the income already declared in the Return of Income filed u/s139(1) and the statement of the Appellant recorded during the course

Om Shanti Reltors, Mumbai vs. Income Tax Officer Ward-20(2)(3), Mumbai

In the result, appeal filed by the assessee is allowed with above directions for statistical purposes

ITA 4113/MUM/2023[2015-16]Status: DisposedITAT Mumbai05 Jun 2024AY 2015-16

Bench: Shri. Prashant Maharshi & Shri. Raj Kumar Chauhanom Shanti Realtors Vs. Income Tax Officer Ward- Omkar House, Off Eastern 20(2)(3) Highway, Opp. Sion Chunnabhatti 2Nd Floor, 210, Piramal Signal, Sion East, Mumbai – 400 Chambers, Parel, Mumbai – 022. 400 012. Pan: Aabfo1844K (Appellant) (Respondent)

Section 133(6)Section 143(1)Section 143(2)Section 250

reported in the audited accounts, it became clear that the lenders were indulging not in real diamond trading business but simply acting as an accommodation entry provider because the share capital of all lenders’ private limited companies were hardly Rs. 1,00,000/- with which it is not even imaginable ... Investigation) and it was observed that the loan creditors appearing in the books of assessee is a paper company which is used for providing accommodation entries. 9. It was therefore concluded by the Ld. AO that the assessee has failed to prove the genuineness of the transactions and identity

Nisha Goel, Delhi vs. Income Tax Officer, Ward 52(3), Ward

In the result, appeal of the assessee is partly allowed as

ITA 2767/DEL/2023[2012-13]Status: DisposedITAT Delhi04 Jun 2024AY 2012-13

Bench: Shri Shamim Yahya & Shri Challa Nagendra Prasadिनधा"रणवष"/Assessment Year: 2012-13

Section 144Section 147Section 151

belief that income escaped assessment. But this is absent. He straightaway records the conclusion that "the above said instruments are in the nature of accommodation entry which the Assessee had taken after paying unaccounted cash to the accommodation entry given (sic giver)". The AO adds that the said accommodation ... rightly pointed out by the ITAT, the 'reasons to believe' are not in fact reasons but only conclusions, one after the other. The expression 'accommodation entry' is used to describe the information set out without explaining the basis for arriving at such a conclusion. The statement that the said entry

Malvika Periwal, Kolkata vs. I.T.O., Ward-29(4), Kolkata

In the result, appeal of the assessee is allowed for statistical purposes

ITA 670/KOL/2022[2014-2015]Status: DisposedITAT Kolkata03 Jun 2024AY 2014-2015

Bench: Shri Rajesh Kumar, Am& Shri Sonjoy Sarma, Jm]

Section 10(38)Section 131Section 68

sale of shares of M/s. Kailash Auto Finance Ltd. According to Ld. AO, the said capital gain is bogus and is only an accommodation entry though the assessee has filed all the evidences before the AO comprising copies of contract notes, de mat account, payment through banking channel

Vipul Kumar Modi, Jaipur vs. Principal Commissioner of Income Tax, Jaipur -I

In the result, appeal of the assessee is allowed

ITA 310/JPR/2024[2016-2017]Status: DisposedITAT Jaipur03 Jun 2024AY 2016-2017

Bench: DR. S. SEETHALAKSHMI (Judicial Member), SHRI RATHOD KAMLESH JAYANTBHAI (Accountant Member)

For Appellant: Shri Sidharth Ranka &For Respondent: Shri Anil Dhaka (CIT) a
Section 142(1)Section 143(1)Section 147Section 263

trading in penny scrip of M/s Goenka Business and Finance Limited & Ejected Marketing Ltd. The assessee is one of the beneficiaries and has taken accommodation entry. Thus, the assessee has unaccounted income to the extent of Rs. 77,79,200/- in form of cash which he had advanced as cash ... which he had advanced as cash to obtain accommodation entries. Because of these reasons, after obtaining necessary approval from competent higher authority, notice u /s 148 of the I.T Act 1961 was issued on 31/3/ 2021. In response to the notice the assessee filed return of income on 21/5/2021 declaring

Ketan Harilal Mehta HUF by Its Karta Ketan H Mehta, Mumbai vs. ITO Ward-33(2)(2) Mumbai Presently Juridiction With ITO 42(1)(1) Mumbai, Mumbai

In the result, the appeal filed by the assessee is allowed

ITA 770/MUM/2023[2014-15]Status: DisposedITAT Mumbai03 Jun 2024AY 2014-15

Bench: Shri B R Baskaran & Shri Pavan Kumar Gadaleketan Harilal Mehta Huf Vs. Ito-42(1)(1), (By Its Karta Kautilya Bhavan, Ketanmehta)No.B/1101, Bkc,Bandra(E), Siddhi Vinayak Tower, Mumbai-400051. Opp Phoenix Hospital, Chikuwadi, Mumbai-400092. Pan/Gir No. : Aaehk3266N Appellant .. Respondent Appellant By : Shri. Nishit Gandhi.Ar Respondent By : Shri. P.D. Chougule.Sr.Dr Date Of Hearing 02.04.2024 Date Of Pronouncement 03.06.2024 आदेश / O R D E R Per Pavan Kumar Gadale, Jm: The Appeal Is Filed By The Assessee Against The Order Of The National Faceless Appeal Centre (Nfac)(Cit(A)) Delhi Passed U/Sec 143(3) & U/Sec250 Of The Income Tax Act. The Assessee Has Raised The Following Grounds Of Appeal:

For Appellant: Shri. Nishit Gandhi.ARFor Respondent: Shri. P.D. Chougule.Sr.DR
Section 10(38)Section 68Section 69C

case that investigation has revealed that the scrip was a penny stock and the capital gain declared was held to be accommodation entries. A broker Basant Periwal & Co. (the said broker) through whom these transactions have been effected had appeared and it was evident that the broker had indulged ... concluded that the whole basis of purchase of this share is a pre-knowledge of rigging of price and subsequently taking accommodation entry for Long term capital gains. We find from the demat statements for the period 1.4.2012 to 31.3.2013 and 1.4.2013 to 31.3.2014, the assessee had dealt in various