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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

M/S. Olive Overseas Pvt. Ltd., Mumbai vs. DCIT, CC-1(1), Mumbai

In the result, all appeals by the assessee are allowed

ITA 1407/MUM/2023[2013-14]Status: DisposedITAT Mumbai27 Jul 2023AY 2013-14

Bench: Shri G.S. Pannu & Shri Sandeep Singh Karhail

For Appellant: Shri Vimal PunamiyaFor Respondent: Shri R.A. Dhyani
Section 132Section 132(1)Section 142(1)Section 143(2)Section 145Section 153CSection 250

learned Commissioner of Income Tax (Appeal) has again erred in upholding the action of learned assessing officer of treating all the business activities as accommodation entry without appreciating the submission / documentary evidence provided to prove the genuineness of all the transaction of Income, Expenses, Business Losses, Capital Gain / Loss, purchase ... found that Mr. Praveen Kumar Jain, through a network of a no. of companies, including the assessee, was involved in the business of providing accommodation entries in the garb of providing unsecured loans, share capital or issuing bogus bills of purchase and sales. During the course of search, the search

M/S. Olive Overseas Pvt. Ltd., Mumbai vs. DCIT, CC-1(1), Mumbai

In the result, all appeals by the assessee are allowed

ITA 1406/MUM/2023[2012-13]Status: DisposedITAT Mumbai27 Jul 2023AY 2012-13

Bench: Shri G.S. Pannu & Shri Sandeep Singh Karhail

For Appellant: Shri Vimal PunamiyaFor Respondent: Shri R.A. Dhyani
Section 132Section 132(1)Section 142(1)Section 143(2)Section 145Section 153CSection 250

learned Commissioner of Income Tax (Appeal) has again erred in upholding the action of learned assessing officer of treating all the business activities as accommodation entry without appreciating the submission / documentary evidence provided to prove the genuineness of all the transaction of Income, Expenses, Business Losses, Capital Gain / Loss, purchase ... found that Mr. Praveen Kumar Jain, through a network of a no. of companies, including the assessee, was involved in the business of providing accommodation entries in the garb of providing unsecured loans, share capital or issuing bogus bills of purchase and sales. During the course of search, the search

M/S. Olive Overseas Pvt. Ltd., Mumbai vs. DCIT, CC-1(1), Mumbai

In the result, all appeals by the assessee are allowed

ITA 1405/MUM/2023[2011-12]Status: DisposedITAT Mumbai27 Jul 2023AY 2011-12

Bench: Shri G.S. Pannu & Shri Sandeep Singh Karhail

For Appellant: Shri Vimal PunamiyaFor Respondent: Shri R.A. Dhyani
Section 132Section 132(1)Section 142(1)Section 143(2)Section 145Section 153CSection 250

learned Commissioner of Income Tax (Appeal) has again erred in upholding the action of learned assessing officer of treating all the business activities as accommodation entry without appreciating the submission / documentary evidence provided to prove the genuineness of all the transaction of Income, Expenses, Business Losses, Capital Gain / Loss, purchase ... found that Mr. Praveen Kumar Jain, through a network of a no. of companies, including the assessee, was involved in the business of providing accommodation entries in the garb of providing unsecured loans, share capital or issuing bogus bills of purchase and sales. During the course of search, the search

M/S. Olive Overseas Pvt. Ltd., Mumbai vs. DCIT, CC-1(1), Mumbai

In the result, all appeals by the assessee are allowed

ITA 1404/MUM/2023[2010-11]Status: DisposedITAT Mumbai27 Jul 2023AY 2010-11

Bench: Shri G.S. Pannu & Shri Sandeep Singh Karhail

For Appellant: Shri Vimal PunamiyaFor Respondent: Shri R.A. Dhyani
Section 132Section 132(1)Section 142(1)Section 143(2)Section 145Section 153CSection 250

learned Commissioner of Income Tax (Appeal) has again erred in upholding the action of learned assessing officer of treating all the business activities as accommodation entry without appreciating the submission / documentary evidence provided to prove the genuineness of all the transaction of Income, Expenses, Business Losses, Capital Gain / Loss, purchase ... found that Mr. Praveen Kumar Jain, through a network of a no. of companies, including the assessee, was involved in the business of providing accommodation entries in the garb of providing unsecured loans, share capital or issuing bogus bills of purchase and sales. During the course of search, the search

M/S. Olive Overseas Pvt. Ltd., Mumbai vs. DCIT, CC-1(1), Mumbai

In the result, all appeals by the assessee are allowed

ITA 1403/MUM/2023[2009-10]Status: DisposedITAT Mumbai27 Jul 2023AY 2009-10

Bench: Shri G.S. Pannu & Shri Sandeep Singh Karhail

For Appellant: Shri Vimal PunamiyaFor Respondent: Shri R.A. Dhyani
Section 132Section 132(1)Section 142(1)Section 143(2)Section 145Section 153CSection 250

learned Commissioner of Income Tax (Appeal) has again erred in upholding the action of learned assessing officer of treating all the business activities as accommodation entry without appreciating the submission / documentary evidence provided to prove the genuineness of all the transaction of Income, Expenses, Business Losses, Capital Gain / Loss, purchase ... found that Mr. Praveen Kumar Jain, through a network of a no. of companies, including the assessee, was involved in the business of providing accommodation entries in the garb of providing unsecured loans, share capital or issuing bogus bills of purchase and sales. During the course of search, the search

M/S. Olive Overseas Pvt. Ltd., Mumbai vs. DCIT, CC-1(1), Mumbai

In the result, all appeals by the assessee are allowed

ITA 1402/MUM/2023[2008-09]Status: DisposedITAT Mumbai27 Jul 2023AY 2008-09

Bench: Shri G.S. Pannu & Shri Sandeep Singh Karhail

For Appellant: Shri Vimal PunamiyaFor Respondent: Shri R.A. Dhyani
Section 132Section 132(1)Section 142(1)Section 143(2)Section 145Section 153CSection 250

learned Commissioner of Income Tax (Appeal) has again erred in upholding the action of learned assessing officer of treating all the business activities as accommodation entry without appreciating the submission / documentary evidence provided to prove the genuineness of all the transaction of Income, Expenses, Business Losses, Capital Gain / Loss, purchase ... found that Mr. Praveen Kumar Jain, through a network of a no. of companies, including the assessee, was involved in the business of providing accommodation entries in the garb of providing unsecured loans, share capital or issuing bogus bills of purchase and sales. During the course of search, the search

Nischint Kanodia, New Delhi vs. ITO Ward - 42(3), New Delhi

In the result, the appeal of the assessee is dismissed

ITA 9739/DEL/2019[2015-16]Status: DisposedITAT Delhi27 Jul 2023AY 2015-16

Bench: Shri G.S. Pannu, Hon’Ble & Shri Amit Shuklaassessment Year: 2015-16

Section 143(3)Section 69A

rated very poor. It has been found by the Investigation Wing of the Department that this company was only used for providing bogus accommodation entry of Long Term Capital Gain that the prices of the shares went sky rocket from Rs.10 to Rs.597 in a span of year without ... these shares went too low. All this goes to show that only for providing fictitious and artificial gain this script was used for bogus accommodation entry of LTCG. no transaction . If these factors are analysed alongwith the information on record and inquiry by the department from various entry operators

Divyaben Prafulchandra Parmar, Surat vs. Income Tax Officer, Ward 1(3)(1), Surat

In the result, appeal filed by the assessee is allowed

ITA 73/SRT/2023[2014-15]Status: DisposedITAT Surat27 Jul 2023AY 2014-15

Bench: Shri Pawan Singh, Jm & Dr. A. L. Saini, Am आयकर अपील सं./Ita No.73/Srt/2023 (Assessment Year: 2014-15) (Physical Hearing) Divyaben Prafulchand Parmar, Vs. The Ito, Ward-1(3)(1), 1-2, Harikrishna Niwas, B/H Braham Surat. Kumari Ashram, Bhatar Road, Surat – 395017. "थायीलेखासं./जीआइआरसं./Pan/Gir No.: Acbpp9559Q (Appellant) (Respondent)

Section 115BSection 143(3)Section 68Section 69

reported by the Investigation Wing, it revealed that the Investigation Wing of Kolkata had conducted inquiries and unearthed some big syndicates involved in providing accommodation entry of Long Term Capital Gain. They have also carried out number of search and surveys in the office premises of more than 32 Share ... paid STT and sales proceeds were received directly in her bank account by RTGS and NEFT. Therefore, her case is not a case of accommodation entries, hence ld Counsel for the assessee prays the Bench that addition of Rs.45,01,840/- u/s 68 and addition of Rs.90

DCIT Central Circle-2(1), Mumbai vs. Shri Bishan Jugraj Jain, Mumbai

Appeal is allowed

ITA 271/MUM/2023[2013-14]Status: DisposedITAT Mumbai26 Jul 2023AY 2013-14

Bench: Shri Prashant Maharishi & Shri Kuldip Singhassessment Year: 2013-14

For Appellant: NoneFor Respondent: Shri Ashok Kumar Ambastha, Sr. D.R
Section 143Section 147Section 148Section 153Section 153ASection 68Section 69C

erred in allowing the appeal of the assessee without going into the merits of the additions as it was evident that assessee had taken accommodation entry in the form of penny stock. 2 Shri Bishan Jugraj Jain 2. Whether on the facts and in the circumstances of the case ... sale of penny scrips and Rs.73,500/- on account of unexplained expenditure under section 69C of the Act on account of commission for arranging accommodation entry and their assessment under section 1433 red with section 147 of the Act. 3. The assessee carried the matter before

Preeti Pankaj Agarwal, Mumbai vs. Income Tax Officer 21(2)(5), Mumbai

In the result, the appeal of the assessee is allowed

ITA 1145/MUM/2023[2011-2012]Status: DisposedITAT Mumbai26 Jul 2023AY 2011-2012

Bench: Shri Aby T. Varkey, Jm आयकर अपील सं/ I.T.A. No.1145/Mum/2023 (निर्धारण वर्ा / Assessment Year: 2011-12) Preeti Pankaj Agarwal बिधम/ Ito-21(2)(5) 7A, Pankaj Mansion, 8, Dr. Piramal Chambers, Vs. Annie Besant Road, Worli, Mumbai-400012. Mumbai-400018. स्थधयी लेखध सं./जीआइआर सं./Pan/Gir No. : Afxpa4228C (अपीलार्थी /Appellant) .. (प्रत्यर्थी / Respondent) Assessee By: Shri Hiten Vasant Revenue By: Shri Dharmvir D Yadav (Sr. Dr) सुनवाई की तारीख / Date Of Hearing: 28/06/2023 घोषणा की तारीख /Date Of Pronouncement: 26/07/2023 आदेश / O R D E R Per Aby T. Varkey, Jm: This Is An Appeal Preferred By The Assessee Against The Order Of The Ld. Cit(A)/Nfac, Delhi Dated 17.02.2023 For Ay. 2011-12. 2. At The Outset, The Ld. Ar Assails, The Action Of Ld. Cit(A) Confirming The Action Of Ao Making Addition Of Rs. 1,55,500/- & Rs. 7,775/- On Purchase & Sale Of Shares Of M/S Sve Resources Ltd. 3. Brief Facts Are That The Assessee Is An Individual Had Filed Her Original Return Of Income On 28.09.2011 Declaring Total Income Of Rs. Nil For Ay. 2011-12. Later, The Case Of The Assessee Was Reopened By Issuance Of Notice U/S 148 Of The Income Tax Act, 1961 (Hereinafter “The Act”) Dated 30.03.2018 On The Ground That The Assessee Had Transacted In The Penny-Stock Named M/S. Svc Resources Ltd. & Ao After Re-Opening The Assessment, Heard The Assessee & Not Satisfied With The Replies Of Assessee Made An Addition Of Rs.1,55,500/-

For Appellant: Shri Hiten VasantFor Respondent: Shri Dharmvir D Yadav (Sr. DR)
Section 148Section 68

paisa per share which itself shows that this was due to minor market fluctuation and cannot by any stretch of imagination be termed as accommodation entry or assessee intentionally indulged in penny-stock transaction. It was pointed out that the purchase and sale of this shares within a span

ITO, Ward-50(3), New Delhi vs. Jagat Jewels, New Delhi

In the result, the appeal of the assessee is allowed and the appeal of the Revenue is dismissed

ITA 4707/DEL/2019[2013-14]Status: DisposedITAT Delhi26 Jul 2023AY 2013-14

Bench: Shri Saktijit Dey & Shri M. Balaganeshassessment Year: 2013-14 Jagat Jewels, Vs Ito, 11/5-B, Pusa Road, Ward-50(3), Metro Pillar No.132, New Delhi. New Delhi. Pan: Aajfb6203F Assessment Year: 2013-14 Ito, Vs. Jagat Jewels, Ward-50(3), 11/5-B, Pusa Road, New Delhi. Metro Pillar No.132, New Delhi. Pan: Aajfb6203F

For Appellant: Shri Mayank Patawari, CA &For Respondent: Ms Princy Singhla, Sr. DR
Section 133(6)Section 143(3)

basis of information received from the ld. Commissioner of Income-tax, Central Circle-4, Surat, observed that the assessee firm had obtained accommodation entry in the form of bogus purchases through Shri Rajendra Jain, Shri Sanjay Choudhary and Shri Dharmichand Jain during FY 2012-13. Accordingly, the ld. AO sought

Home Developers Project Pvt. Ltd., New Delhi vs. DCIT, Central Circle- 14, New Delhi

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

ITA 390/DEL/2019[2012-13]Status: DisposedITAT Delhi26 Jul 2023AY 2012-13

Bench: Sh. N. K. Billaiya & Sh. Anubhav Sharmaassessment Year: 2012-13

Section 234BSection 271(1)Section 68

scrutiny assessment proceedings the assessee was asked to explain why addition of Rs. 3 crores should not be made on account of accommodation entry taken from Himanshu Verma who has admitted in the statement that he was an entry operator. 6. In its reply the assessee stated that

Jagat Jewels, New Delhi vs. ITO, Ward-50(3), New Delhi

In the result, the appeal of the assessee is allowed and the appeal of the Revenue is dismissed

ITA 3665/DEL/2019[2013-14]Status: DisposedITAT Delhi26 Jul 2023AY 2013-14

Bench: Shri Saktijit Dey & Shri M. Balaganeshassessment Year: 2013-14 Jagat Jewels, Vs Ito, 11/5-B, Pusa Road, Ward-50(3), Metro Pillar No.132, New Delhi. New Delhi. Pan: Aajfb6203F Assessment Year: 2013-14 Ito, Vs. Jagat Jewels, Ward-50(3), 11/5-B, Pusa Road, New Delhi. Metro Pillar No.132, New Delhi. Pan: Aajfb6203F

For Appellant: Shri Mayank Patawari, CA &For Respondent: Ms Princy Singhla, Sr. DR
Section 133(6)Section 143(3)

basis of information received from the ld. Commissioner of Income-tax, Central Circle-4, Surat, observed that the assessee firm had obtained accommodation entry in the form of bogus purchases through Shri Rajendra Jain, Shri Sanjay Choudhary and Shri Dharmichand Jain during FY 2012-13. Accordingly, the ld. AO sought

Dilip Sumermal Kanugo, Mumbai vs. I.T.O.-19(1)(4), Mumbai

ITA 1331/MUM/2023[2010-2011]Status: DisposedITAT Mumbai25 Jul 2023AY 2010-2011

Bench: Shri Kuldip Singhassessment Year: 2010-11

For Appellant: Shri Rajkumar Singh, A.RFor Respondent: Shri B. Laxmi Kanth, D.R
Section 143(3)Section 147

proprietorship concern of M/s. Manidhari Stainless (India) and its name appears in the list given by the Sales Tax Department being into availing accommodation entries either to inflate the purchases or expenses in order to reduce their tax liability and to avoid sales tax. It has come on record that

M/S. Steering Securities and Finance Pvt. Ltd., New Delhi vs. ITO, New Delhi

In the result, the appeal of the assessee is allowed

ITA 5194/DEL/2014[2005-06]Status: DisposedITAT Delhi25 Jul 2023AY 2005-06

Bench: Sh. C. M. Gargdr. B. R. R. Kumar

For Appellant: Sh. Ashok Kumar Jain, CAFor Respondent: Sh. Anuj Garg, Sr. DR
Section 147Section 148Section 151(2)Section 68

assessee company M/s Steering Securities & Finance Private Limited (termed beneficiary) during the previous year 2004-05 relevant to Assessment Year 2005-06 had taken accommodation entries from persons in mentioned in column 3 as below. The detail of which is mentioned below Attached Annexure "A". Quantum of amount of such ... goes to conclusively prove that the assessee company i.e. M/s 3 Steering Securities & Finance Pvt. Ltd. Steering Securities & Finance Private Limited has received accommodation entry for Rs. 72,00,000/- for the FY 2004-05. In view of facts stated herein above it is clear that the assessee company managed

M/S. T.C. Software Consultancy Pvt. Ltd, Mumbai vs. PCIT -1, Mumbai

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

ITA 1218/MUM/2022[2011-12]Status: DisposedITAT Mumbai21 Jul 2023AY 2011-12

Bench: Ms. Padmavathy S. () & Shri Rahul Chaudhary ()

Section 133(6)Section 143(3)Section 263Section 56(1)Section 68

Software Consultancy Private Limited Shrirish C Shah and that its accounts along with another 212 companies are used by Shirish C Shah for providing accommodation entries. The assessee also submitted that the amount received towards share premium is subsequently transferred to M/s Empower India Limited which again is controlled ... whether in the hands of Shirish Chandrakant Shah or the assessee and it was also observed that the assessee company is only providing the accommodation entries whereas the real beneficiary of the of the income from the said transactions was Shirish Chandrakant Shah. We, therefore, respectfully following the ratio laid

ACIT Central Circle-26, New Delhi vs. Holeon Traders Pvt Ltd, New Delhi

In the result, the appeals of revenue are partly allowed and cross objections of assessee are dismissed

ITA 4958/DEL/2019[2012-13]Status: DisposedITAT Delhi21 Jul 2023AY 2012-13

Bench: Shri Chandra Mohan Garg & Dr. B.R.R. Kumar

For Appellant: Shri Ved Jain, Adv
Section 68

above the learned counsel of assessee submitted that the addition cannot be made in the hands of the conduit companies once the beneficiaries and accommodation entry provider are identified and addition of commission income has already been made in the hands of the accommodation entry provider. Further placing reliance ... circumstances and order of ld. CIT(A) directing the deletion of commission addition has been reversed by making addition @0.47% to the turnover of accommodation entries after elimination of circular transaction. Therefore ground no. 2 of revenue may kindly be allowed reversing the conclusion

ITO, New Delhi vs. Sh. Ashok Kumar Gupta, New Delhi

In the result, the appeal is partly allowed

ITA 3291/DEL/2016[2003-04]Status: DisposedITAT Delhi21 Jul 2023AY 2003-04

Bench: Or During The Hearing Of This Appeal.”

Section 144Section 147Section 148Section 263Section 68

bank channel in the shape of cheques. The Ld. CIT(A) while deleting the addition held that the assessee doing the business of accommodation entries to the various person/beneficiaries, therefore, directed the A.O. to take the rate of accommodation entry at 0.60% on total turnover ... made addition of Rs.11,00,58,100/-. However, the appellant submitted that it is an admitted fact that the appellant was engaged in providing accommodation entries to various persons, The total deposits in the three bank accounts was of Rs.5,28,16,917/- as against

Iwi Stationary Pvt. Ltd., Mumbai vs. ACIT, Circle- 3(2)(1), Mumbai

In the result, both the appeals filed by the assessee are allowed

ITA 1572/MUM/2023[2014-15]Status: DisposedITAT Mumbai20 Jul 2023AY 2014-15

Bench: Shri B.R. Baskaran (Am) & Shri Narender Kumar Choudhry (Jm)

Section 132Section 143(1)Section 148Section 14ASection 68

group concerns. During the course of search, it was noticed that the Shri Vipul Vidur Bhat and his associate concerns are providing bogus accommodation entries in the form of unsecured loans to various beneficiaries for commission. It was noticed that the assessee has obtained unsecured loan of Rs. 20 lakhs ... assessee on the reasoning that Mr. Vipul Vidur Bhat has admitted on oath that he and his group of companies were providing only accommodation entries. Accordingly the Assessing Officer treated the loan of Rs. 20 lakhs received by the assessee from M/s. Shyam Alcohol & Chemicals Ltd. as unexplained cash credit

Iwi Stationary Pvt. Ltd., Mumbai vs. ACIT, Circle- 3(2)(1), Mumbai

In the result, both the appeals filed by the assessee are allowed

ITA 1571/MUM/2023[2013-14]Status: DisposedITAT Mumbai20 Jul 2023AY 2013-14

Bench: Shri B.R. Baskaran (Am) & Shri Narender Kumar Choudhry (Jm)

Section 132Section 143(1)Section 148Section 14ASection 68

group concerns. During the course of search, it was noticed that the Shri Vipul Vidur Bhat and his associate concerns are providing bogus accommodation entries in the form of unsecured loans to various beneficiaries for commission. It was noticed that the assessee has obtained unsecured loan of Rs. 20 lakhs ... assessee on the reasoning that Mr. Vipul Vidur Bhat has admitted on oath that he and his group of companies were providing only accommodation entries. Accordingly the Assessing Officer treated the loan of Rs. 20 lakhs received by the assessee from M/s. Shyam Alcohol & Chemicals Ltd. as unexplained cash credit