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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

DCIT, Mumbai vs. Bhagwana Ram Bishnoi, Mumbai

Accordingly, the appeal ordingly, the appeals of the assessee as well as Revenue are of the assessee as well as Revenue are dismissed

ITA 3903/MUM/2025[2012-13]Status: DisposedITAT Mumbai26 Aug 2025AY 2012-13

Bench: Shri Sandeep Gosain () & Shri Om Prakash Kant () Assessment Year: 2012-13 Bhagwana Ram Bishnoi, Dcit Circle 19(1), Shop No. 01, Ground Floor, Piramal Chambers Dr. Ss Rao Vs. Radhakrishna Co-Op. Hsg. Soc., 4Th Marg, Parel, Floor, Khetwadi Lane Khetwadi Mumbai-400012. Mumbai-400004. Pan No. Acopb 3309 B Appellant Respondent Assessment Year: 2012-13 Dcit Circle 19(1), Bhagwana Ram Bishnoi, Piramal Chambers Dr. Ss Rao Marg, Shop No. 01, Gound Floow, Vs. Parel, Radhakrishna Co-Op. Hsg. Mumbai-400012. Soc., 4Th Floor, Khetwadi Lane Khetwadi Mumbai-400004. Pan No. Acopb 3309 B Appellant Respondent

For Appellant: Ms. Bharat KumarFor Respondent: 20/08/2025

office of the Director General of Income Director General of Income-tax (Investigation), Mumbai, th tax (Investigation), Mumbai, that the assessee had obtained accommodation entries, in the nature of assessee had obtained accommodation entries, in the nature of assessee had obtained accommodation entries, in the nature of hawala bills, aggregating ... engaged in the business of providing these parties are engaged in the business of providing these parties are engaged in the business of providing accommodation entries only. The parties are issuing bills without accommodation entries only. The parties are issuing bills without accommodation entries only. The parties are issuing bills

Bhagwana Ram Bishnoi, Mumbai vs. DCIT Circle 19(1), Mumbai

Accordingly, the appeal ordingly, the appeals of the assessee as well as Revenue are of the assessee as well as Revenue are dismissed

ITA 1815/MUM/2025[2012-13]Status: DisposedITAT Mumbai26 Aug 2025AY 2012-13

Bench: Shri Sandeep Gosain () & Shri Om Prakash Kant () Assessment Year: 2012-13 Bhagwana Ram Bishnoi, Dcit Circle 19(1), Shop No. 01, Ground Floor, Piramal Chambers Dr. Ss Rao Vs. Radhakrishna Co-Op. Hsg. Soc., 4Th Marg, Parel, Floor, Khetwadi Lane Khetwadi Mumbai-400012. Mumbai-400004. Pan No. Acopb 3309 B Appellant Respondent Assessment Year: 2012-13 Dcit Circle 19(1), Bhagwana Ram Bishnoi, Piramal Chambers Dr. Ss Rao Marg, Shop No. 01, Gound Floow, Vs. Parel, Radhakrishna Co-Op. Hsg. Mumbai-400012. Soc., 4Th Floor, Khetwadi Lane Khetwadi Mumbai-400004. Pan No. Acopb 3309 B Appellant Respondent

For Appellant: Ms. Bharat KumarFor Respondent: 20/08/2025

office of the Director General of Income Director General of Income-tax (Investigation), Mumbai, th tax (Investigation), Mumbai, that the assessee had obtained accommodation entries, in the nature of assessee had obtained accommodation entries, in the nature of assessee had obtained accommodation entries, in the nature of hawala bills, aggregating ... engaged in the business of providing these parties are engaged in the business of providing these parties are engaged in the business of providing accommodation entries only. The parties are issuing bills without accommodation entries only. The parties are issuing bills without accommodation entries only. The parties are issuing bills

Mangalam Viniyog Pvt. Ltd., Kolkata vs. I.T.O., Ward - 9(1), Kolkata

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

ITA 2494/KOL/2024[2016-2017]Status: DisposedITAT Kolkata25 Aug 2025AY 2016-2017

Bench: Shri Duvvuru Rl Reddy, Vice-(Kz) & Shri Rajesh Kumari.T.A. No. 2494/Kol/2024 Assessment Year: 2016-2017 Mangalam Viniyog Pvt. Limited,……………..Appellant C/O. Subash Agarwal & Associates, Advocates, Siddha Gibson, 1, Gibson Lane, Suite 213, 2Nd Floor, Kolkata-700069 [Pan:Aadcm5074C] -Vs.- Income Tax Officer,………………………….....Respondent Ward-9(1), Kolkata, Aayakar Bhawan, P-7, Chowringhee Square, Kolkata-700069 Appearances By: Shri Subhas Agarwal, Advocate, Appeared On Behalf Of The Assessee Shri Dheeraj, Addl. Cit, Sr. D.R., Appeared On Behalf Of The Revenue Date Of Concluding The Hearing: August 05, 2025 Date Of Pronouncing The Order: August 25, 2025 O R D E R

Section 132Section 142(1)Section 148Section 148ASection 68Section 69C

illiquid derivatives options on BSE platform, entered into through broker M/s. N.S. Broking Pvt. Limited, whose name appeared in the report for providing accommodation entry for the said transaction to the tune of Rs.50,03,600/- in FY 2015-16 related to the AY 2016-17. The assessment ... submit any reply nor sought any extension of time for furnishing its reply. The assessee was one of the beneficiaries who has taken accommodation entry from the transaction in the scrip of M/s. Yamini Investment Company Ltd. Another show-cause notice dated 17.05.2023 was issued to the assessee to explain