“entry operator”

Cash Credits & Unexplained ItemsSection 68Section 682,071 judgments

The decision most relied on for entry operator is CIT v. Jamnadevi Agarwal (328 ITR 656), cited in 230 judgments on BharatTax.

Leading authorities on entry operator

CIT v. Jamnadevi Agarwal

328 ITR 656 · 2010 · High Court

230

citing judgments

When faced with allegations of bogus long-term capital gains from penny stocks, the Assessing Officer must discharge the onus of proving that the assessee's transactions were not genuine. The assessee can rely on the principle of preponderance of probability, and the Revenue must present substantial evidence to establish that the transactions were a colourable device or that the assessee was an entry operator.

ITO, 19(3) (4) Mumbai v. Shamim M Bharwani

69 Taxmann.com 65 · 2016 · Reported

142

citing judgments

Long Term Capital Gains (LTCG) from penny stock transactions are liable to be treated as bogus and added back under Section 68 as unexplained cash credits, especially when evidence suggests the involvement of entry operators providing accommodation entries.

5. PCIT v. Paramount Communication (P.) Ltd. Delhi High Court

392 ITR 444 · 2017 · High Court

111

citing judgments

For valid initiation of reassessment proceedings, the Assessing Officer must possess tangible material and apply independent mind to form a 'reason to believe' that income has escaped assessment. Reassessment cannot be based on mere borrowed satisfaction or unverified information without proper scrutiny.

2 CIT v. Indrajit Singh Suri

33 Taxmann.com 281 · 2013 · High Court

100

citing judgments

The validity of reassessment proceedings initiated under Sections 147/148 against legal representatives of a deceased assessee requires a demonstrable 'reason to believe' that income escaped assessment, often based on third-party information such as alleged accommodation entries.

Dharappa v. Bijapur Co-operative Milk Producers Societies Union Ltd.

9 SCC 109 · 2007 · Reported

citing judgments

When a State Act has obtained presidential assent, its repugnant provisions prevail over the provisions of a Central Act in that State, even if both laws relate to subjects in the Concurrent List. This principle was applied to determine repugnancy between the Karnataka Co-operative Societies Act, 1959, and the Industrial Disputes Act, 1947.

CIT v. Sanghamitra Bharali

361 ITR 481 · 2014 · High Court

citing judgments

Capital gains arising from sham transactions, particularly those involving penny stocks designed to appear genuine, are not exempt under Section 10(38) but are taxable as unaccounted income brought into the books.

CIT v. Active Traders (P.) Ltd.

214 ITR 583 · 1995 · High Court

citing judgments

When a sum is credited on account of share capital or share premium, the assessee must establish the existence, identity, genuineness, and creditworthiness of the share applicants, going beyond mere submission of documents. The Assessing Officer has the power to investigate and lift the corporate veil to ascertain the bonafides of such transactions.

Income Tax Vs. India Discount Co. Ltd. 75 ITR 191 (SC), Commissioner of Income Tax v. Provincial Farmers (P) Ltd.

245 ITR 421 · 2000 · Supreme Court

citing judgments

The entry in the books of accounts is not determinative of the true nature of a transaction for income tax purposes; the substance of the transaction, rather than its accounting treatment, governs its taxability and deductibility.

Judgments citing entry operator

Rekha Manish Kapadia, Mumbai vs. ACIT-CC-8(2), Mumbai

In the result, all the appeals for AY 2014-15 are allowed partly

ITA 283/MUM/2025[2018-19]Status: DisposedITAT Mumbai26 Nov 2025AY 2018-19

Bench: Shri Om Prakash Kant () & Shri Raj Kumar Chauhan ()

Section 132Section 142(1)Section 143(2)Section 145(3)Section 153ASection 68

bogus purchases and sales. Invoking section 145(3) of the Act, he rejected the books of account and, treating the assessee as an entry operator, estimated commission income at 5% of the declared turnover of ₹51,78,40,543/-, - resulting in an addition of ₹2,58,92,027/-. The Assessing ... monthly profits, was disregarded without cogent reasons. 4.3 Without prejudice, it was also argued that, even assuming the business was treated as an accommodation-entry operation, the rate of commission could not reasonably exceed 0.05% to 0.5 paisa on turnover. 4.4 The Ld. CIT(A), after considering the assessment order

Rekha Manish Kapadia, Mumbai vs. ACIT CC 8(2), Mumbai

In the result, all the appeals for AY 2014-15 are allowed partly

ITA 282/MUM/2025[2017-18]Status: DisposedITAT Mumbai26 Nov 2025AY 2017-18

Bench: Shri Om Prakash Kant () & Shri Raj Kumar Chauhan ()

For Appellant: NoneFor Respondent: Mr. Uma Shankar Prasad, CIT-DR

Section 132Section 145(3)Section 153ASection 68

treating the Manish Kantilal Kapadia & Rekha Manish Kapadia 5 ITA Nos. 264, 318 to 322/MUM/2025 & ITA Nos. 263, 280 to 284/MUM/2025 assessee as an entry operator, estimated commission income at 5% of the declared turnover of %51,78,40,543/-, resulting in an addition ... monthly profits, was disregarded without cogent reasons. 4.3 Without prejudice, it was also argued that, even assuming the business was treated as an accommodation-entry operation, the rate of commission could not reasonably exceed 0.05% to 0.5 paisa on turnover. 4.4 The Ld. CIT(A), after considering the assessment order

Rekha Manish Kapadia, Mumbai vs. ACIT-CC-8(2), Mumba

In the result, all the appeals for AY 2014-15 are allowed partly

ITA 281/MUM/2025[2016-17]Status: DisposedITAT Mumbai26 Nov 2025AY 2016-17

Bench: Shri Om Prakash Kant () & Shri Raj Kumar Chauhan ()

For Appellant: NoneFor Respondent: Mr. Uma Shankar Prasad, CIT-DR

Section 132Section 145(3)Section 153ASection 68

Rekha Manish Kapadia, Mumbai vs. ACIT-CC-8(2), Mumbai

In the result, all the appeals for AY 2014-15 are allowed partly

ITA 280/MUM/2025[2015-16]Status: DisposedITAT Mumbai26 Nov 2025AY 2015-16

Bench: Shri Om Prakash Kant () & Shri Raj Kumar Chauhan ()

For Appellant: NoneFor Respondent: Mr. Uma Shankar Prasad, CIT-DR

Section 132Section 145(3)Section 153ASection 68

Manish Kantilal Kapadia, Mumbai vs. DCIT CC -8(2), Mumbai

In the result, all the appeals

ITA 264/MUM/2025[2014-15]Status: DisposedITAT Mumbai26 Nov 2025AY 2014-15

Bench: Shri Om Prakash Kant () & Shri Raj Kumar Chauhan ()

For Appellant: NoneFor Respondent: Mr. Uma Shankar Prasad, CIT-DR

Kantilal Kapadia 5 ITA Nos. 264, 318 to 322/MUM/2025 & ITA Nos. ITA Nos. 264, 318 to 322/MUM/2025 263, 280 to 284/MUM/2025 assessee as an entry operator, estimated commission income at 5% assessee as an entry operator, estimated commission income at 5% assessee as an entry operator, estimated commission income ... also argued that, even Without prejudice, it was also argued that, even Without prejudice, it was also argued that, even assuming the entry operation, the business was treated as an accommodation business was treated as an accommodation-entry operation, the rate of commission could not reasonably exceed

Rekha Manish Kapadia, Mumbai vs. ACIT-CC-8(2), Mumbai

In the result, all the appeals for AY 2014-15 are allowed partly

ITA 263/MUM/2025[2014-15]Status: DisposedITAT Mumbai26 Nov 2025AY 2014-15

Bench: Shri Om Prakash Kant () & Shri Raj Kumar Chauhan ()

For Appellant: NoneFor Respondent: Mr. Uma Shankar Prasad, CIT-DR

Section 132Section 142(1)Section 143(2)Section 145(3)Section 153ASection 68

bogus purchases and sales. Invoking section 145(3) of the Act, he rejected the books of account and, treating the assessee as an entry operator, estimated commission income at 5% of the declared turnover of ₹51,78,40,543/-. The Assessing Officer further made an addition ... monthly profits, was disregarded without cogent reasons. 4.3 Without prejudice, it was also argued that, even assuming the business was treated as an accommodation-entry operation, the rate of commission could not reasonably exceed 0.05% to 0.5 paisa on turnover. 4.4 The Ld. CIT(A), after considering the assessment order

DCIT(CC)-8(3), Mumbai vs. Supama Financial Service Limited, Mumbai

In the result, the appeal of the Revenue is dismissed

ITA 6820/MUM/2024[2014-15]Status: DisposedITAT Mumbai26 Nov 2025AY 2014-15

Bench: Shri Om Prakash Kant () & Shri Raj Kumar Chauhan () Assessment Year: 2014-15

For Respondent: Ms. Riddhisha Jain

Section 10(38)

promoters of companies that finally purchased the shares, the promoters of companies that finally purchased the shares, the promoters of Penny stock companies, the entry operators who managed the Penny stock companies, the entry operators who managed the Penny stock companies, the entry operators who managed the dummy compan dummy

Assistant Commissioner of Income Tax, Circle-1(1)(1), Meerut, Meerut (U.P.) vs. Nita Rastogi, Meerut (U.P.)

In the result, appeal of the Revenue is dismissed

ITA 3382/DEL/2025[2013-14]Status: DisposedITAT Delhi26 Nov 2025AY 2013-14

Bench: Shri Sudhir Kumar & Shri Manish Agarwal[Assessment Year : 2013-14] Acit Vs Nita Rastogi Circle-1(1)(1) 32-C, Janta Nagar, Garh Road, Meerut-250001. Meerut-250002. Pan-Aanpr7715E Appellant Respondent Revenue By Shri Shyam Manohar Singh, Sr.Dr Assessee By Dr. Kapil Goel, Adv. Date Of Hearing 23.09.2025 Date Of Pronouncement 26.11.2025

Section 139(1)Section 147Section 148Section 250Section 68Section 690

detailed findings by the AO establishing the bogus nature of the Long-Term Capital Gain (LTCG) claimed through forged contract notes and transactions with entry operators. 3. On the facts and in the circumstances of the case and in law, the 1d. CIT(A) has erred in quashing the reassessment ... appreciated the findings of Investigation Wing that clearly established, the assessee has generated bogus LTCG through entry operators. 6. On the facts and circumstances of the case and in law, the Ld. CIT(A) has erred in allowing the appeal of the assessee by quoting various facts and case

A. T. Invofin Private Limited, Delhi vs. DCIT Central Circle 26, Delhi

The appeal of the assessee is allowed

ITA 1883/DEL/2025[2013-14]Status: DisposedITAT Delhi26 Nov 2025AY 2013-14

Bench: Shri Anubhav Sharma & Shri Manish Agarwal, Accountnat Member [Assessment Year: 2013-14]

Section 10(38)Section 143(2)Section 147Section 148Section 68

conducted detailed enquiry and analysis which revealed that : The assessee had entered into pre fabricated share investment/trading of equities controlled by entry operators to book fictitious losses. The company whose shares were purchased/sold was having no worth due to weak financial base. During the year under consideration assessee booked fictitious ... During the investigation it was found that contract note/bills for the purchase of shares were fabricated, shares were purchased through stock market by entry operator controlled entity immediately before the ultimate sales by the assessee/ beneficiary, transferred to the account of beneficiary within a few days of purchase

Jainmati Jain, Yojana Vihar vs. ITO Ward 56(2) New Delhi, New Delhi

In the result, the Appeal filed by the Assessee is allowed

ITA 4649/DEL/2024[2015-16]Status: DisposedITAT Delhi26 Nov 2025AY 2015-16

Bench: Shri Yogesh Kumar U.S. & Shri Naveen Chandrajainmati Jain Vs Ito C-513, Yojanavihar, Ward 56(2) New Delhi New Delhi Pan: Agkpj4857G Appellant Respondent Assessee By Ms. Tanya, Adv Revenue By Sh. Om Praksh, Sr. Dr Date Of Hearing 24/11/2025 Date Of Pronouncement 26/11/2025 Order

Section 68

direct or indirect connection with the assessee nor there is any reference that assessee was any kind of beneficiary of accommodation entry by any entry operator. So much so, there is no reference to the scrip namely Alps Motors Finance Limited. Otherwise also, such a statement cannot be the sole ... case that transaction of the assessee, both in case of purchase and sale are effected by any bogus entities controlled by any entry operator; or brokers have failed to maintain KYC norms; or there is any statement that entities involved in price movement or scrip operator or promoters of listed

DCIT, Central Circle-8(1), Mumbai vs. Jainam Investments, Mumbai

In the result, both the appeal of the Revenue as well as cross-

ITA 794/MUM/2025[2016-17]Status: DisposedITAT Mumbai25 Nov 2025AY 2016-17

Bench: Shri Om Prakash Kant () & Shri Rahul Chaudhary ()

For Respondent: Mr. Suchek Anchaliay

Section 132(4)Section 147

natural incident of legitimate market trading and cannot, without more, warrant an adverse inference; (v) no nexus with any alleged counter-party or entry operator has been established; and (vi) once the assessee has produced all primary evidences substantiating the genuineness of trades, the burden shifts decisively to the Revenue

Intergrator Consultants Private Limited, Delhi vs. DCIT, Central Circle - 1(4), Mumbai

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

ITA 2256/MUM/2025[2015-16]Status: DisposedITAT Mumbai25 Nov 2025AY 2015-16

Bench: Hon’Ble Shri Sandeep Gosain& Shri Girish Agrawal

Section 143(3)Section 250

relevant information regarding companies from which it had received share application money and Assessing Officer had not doubted such transaction, mere statement of an entry operator that companies in question were 'paper companies', by itself was insufficient to reopen assessment, unless Assessing Officer had further information that those companies were

ACIT Circle 3 3 1, Mumbai vs. Ks Distribution and Sales Private Limited, Mumbai

Appeal is dismissed

ITA 1826/MUM/2025[2011-12]Status: DisposedITAT Mumbai25 Nov 2025AY 2011-12

Bench: Shri Rahul Chaudhary (Jm) & Shri Omkareshwar Chidara (Am) Acit, Circle (3)(3)(1) Ks Distribution & Room No. 522 Sales Pvt. Ltd. Aayakar Bhavan Vs. 101 Laxmi Plaza, Laxmi M.K. Road Ind. State, New Link Mumbai-400 020. Road, Andheri West Mumbai-400 053. Pan : Aaacg1667L Appellant Respondent

For Appellant: Shri Henanshu JoshiFor Respondent: Shri Neeraj Agarwala

Section 10(38)Section 271Section 68

justified in deleting the addition made as unexplained cash credit u/s.68 of the Act ignoring the fact that entry operator in his statement recorded, had accepted that he resorted to manipulation of scrip JMD Telefilms and converted the unaccounted money into the books in the form of Bogus gains ... assessee ignoring the findings of the Directorate of Investigation of Mumbai and Kolkata which established 4 KS Distribution and Sales Pvt. Ltd. that entry operators and the assessee had worked out an arrangement in which the shares were acquired by the assessee, share prices were rigged

Shri Swatantra Kumar Shukla, Kanpur vs. Deputy Commissioner of Income Tax-3, Kanpur

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

ITA 575/LKW/2019[2015-16]Status: DisposedITAT Lucknow24 Nov 2025AY 2015-16

Bench: Sh. Sudhanshu Srivastava & Sh. Nikhil Choudharya.Y. 2015-16 Swatantra Kumar Shukla, Vs. Dy. Cit-3, Kanpur 61/139, Sita Ram Mohal, Kanpur- 208001 (U.P.) Pan: Acaps5484N (Appellant) (Respondent) Assessee By: Sh. P.K. Kapoor, C.A. Revenue By: Sh. R.R.N. Shukla, Addl Cit Dr Date Of Hearing: 03.09.2025 Date Of Pronouncement: 24.11.2025 O R D E R Per Nikhil Choudhary, A.M.: This Is An Appeal Filed By The Assessee Against The Orders Of The Ld. Cit(A)- 1, Kanpur, Passed On 29.07.2019 Wherein The Appeal Of The Assessee Against The Orders Passed By The Assessing Officer Under Section 143(3) Of The Act For The A.Y. 2015-16 On 29.12.2017 Has Been Dismissed. The Grounds Of Appeal Are As Under: - “1. That The Ld Cit(A) Was Wrong In Confirming The Addition Of Rs. 1,39,81,850- Made By The Ao Without Any Valid Reason. 2. That The Revenue Was Wrong In Disallowing The Claim Of Long Term Capital Gains U/S 10(38) Of The Act & The Same Is Against Facts & Law. 3. That The Various Case Law Cited By The Revenue In Rejecting The Claim Is Wrong In As Much As The Facts Of The Appellant'S Case Are Distinguishable From The Cited Case Law. 4. That The Revenue Was Wrong In Invoking Section 68 Of The Act & The Same Is Not Justified & Unwarranted. 5. That It Was Wrong On The Part Of Revenue To Invoke Section 68 Of The Act In As Much As Initial Onus On The Assessee To Establish Identity, Credit Capacity Of The Creditor & Genuineness Of The Transaction Was Discharged. 6. That The Finding Of The Ld Ao That 'Long Term Capital Gains Of Rs.1 39,81,850/ Claimed By The Assessee Is Held To Have Been Arranged By The Assessee Through

For Appellant: Sh. P.K. Kapoor, C.AFor Respondent: Sh. R.R.N. Shukla, Addl CIT DR

Section 10(38)Section 143(3)Section 68

that the script of, ‘Jackson Investments Ltd.,’ had been used to provide such accommodation entries. Specific reference was made to the statement of an entry operator Sh. Arun Kumar Khemka, who had admitted to controlling and managing various paper companies including Jackson Investments Ltd., and pointed out that no business ... investigation into scripts of Penny Stock companies and discovered that M/s Jackson Investments Ltd, was a Penny Stock; Sh. Arun Kumar Khemka, an Entry Operator, had confessed that M/s Jackson Investments Ltd was used for providing accommodation entries in the form of LTCG and that no business operations were conducted

Pawan Kumar Agarwal, Kolkata vs. ITO 22(2), Kolkata

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

ITA 964/KOL/2025[2017-18]Status: DisposedITAT Kolkata21 Nov 2025AY 2017-18

Bench: Shri Duvvuru Rl Reddy, Vice-(Kz) I.T.A. No. 964/Kol/2025 Assessment Year: 2017-2018 Pawan Kumar Agarwal,………….………...……Appellant P-912, Lake Town, Block-A, Kolkata-700089, West Bengal [Pan:Acvpa3110A] -Vs.- Income Tax Officer,…………………………..…..Respondent Ward-22(2), Kolkata, Bamboo Villa, Kolkata-700014 Appearances By: Shri Akshay Ringasia, Advocate, Appeared On Behalf Of The Assessee Shri Sanjib Kumar Paul, Addl. Sr. D.R., Appeared On Behalf Of The Revenue Date Of Concluding The Hearing: November 19, 2025 Date Of Pronouncing The Order: November 21, 2025 O R D E R

Section 139(1)Section 69A

received Rs.5,00,035/- from M/s/ Blossom Trexim Pvt. Ltd. claimed to be a shell entity controlled by one Shri Mukesh Banka, an entry operator. The ld. Assessing Officer completed the assessment solely on the basis of third-party statements and investigation reports. The amount of Rs.5,00,035/- represented

Vikas Nahata, Kolkata vs. ITO, Ward 44(2), Kolkata

In the result, the appeal of the assessee is allowed

ITA 1589/KOL/2025[2011-2012]Status: DisposedITAT Kolkata21 Nov 2025AY 2011-2012

Bench: Shri Duvvuru Rl Reddy, Vice-(Kz) I.T.A. No. 1589/Kol/2025 Assessment Year: 2011-2012 Vikas Nahata,……..……………….………...……Appellant 1St Floor, Prn House, Burrabazar, 177, Mahatma Gandhi Road, Kolkata-700007 [Pan:Abppn4488D] -Vs.- Income Tax Officer,…………………………..…..Respondent Ward-44(2), Kolkata, 3, Government Place (West), Kolkata-700001 Appearances By: Shri S.K. Tulsiyan, Advocate, Appeared On Behalf Of The Assessee Smt. Sima Das Biswas, Sr. D.R., Addl. Cit, Appeared On Behalf Of The Revenue Date Of Concluding The Hearing: October 16, 2025 Date Of Pronouncing The Order: November 21, 2025 O R D E R

Section 10(38)Section 142(1)Section 144Section 148Section 68

transactions of penny stock companies listed with Bombay Stock Exchange with the involvement of the promoters of the penny stock companies, unscrupulous brokers and entry operators. On analyzing the information, it was found that the assessee on sale of shares of Global Capital Market Ltd. has plough backed his unaccounted

Anju Parekh, Dhamtari vs. Income Tax Officer, Ward-Dhamtari, Dhamtari

In the result, appeal of the assessee is allowed

ITA 384/RPR/2023[2013-14]Status: DisposedITAT Raipur20 Nov 2025AY 2013-14

Bench: Shri Partha Sarathi Chaudhuryआयकर अपील सं. / Ita No.384/Rpr/2023 "नधा"रण वष" / Assessment Year : 2013-14 Anju Parekh, Prop. M/S. Kushal Investment, Near Petrol Pump, Station Road, Dhamtari, Chhattisgarh-493773 Pan No. Akepp9283A

For Appellant: Shri Sunil Kumar Agrawal, CAFor Respondent: Shri Ram Tiwari, CIT-DR

Section 10(38)Section 68

case and in law, Id CIT(A) has erred in sustaining addition of Rs.11,84,000 on the basis of various statements recorded of entry operators in some unrelated proceedings when no cross examination has been made by the revenue; addition is unsustainable in the eyes of law; is liable ... prices of the shares of the penny stock companies are rigged and raised through circular trading. These are done through the involvement of entry operator, share brokers etc. and they managed the bogus companies and used them for circular transactions to rig the price of shares. The report of Investigation

Durga Prasad Sharma, Jaipur vs. I.T.O. Ward 1(1), Jaipur

In the result, the appeal of the assessee is allowed

ITA 1038/JPR/2025[A.Y. 2018-19]Status: HeardITAT Jaipur20 Nov 2025

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

For Appellant: Sh. G. M. Mehta, CAFor Respondent: Sh. Ghanshyam Meena, JCIT

Section 115BSection 148Section 2Section 69C

Jamshedpur, and corroborated by the Commercial Taxes Department, Government of Jharkhand, indicating that M/s Sidhi Vinayak Metal & Salt Company Pvt. Ltd. was a known entry operator engaged in issuing bogus purchase bills without actual supply of goods. A list of beneficiaries of such accommodation entries included the appellant ... case of N.K. Proteins Ltd. v. DCIT (2017) 292 CTR 354 (SC) upheld the disallowance of entire bogus purchases from a known entry operator and reversed a partial relief previously granted by the ITAT. The Gujarat High Court in the same matter emphasized that where the supplier is non-existent

Magnolia Martinique Clothing Private Limited, Delhi vs. DCIT, Central Circle 17, New Delhi, Delhi

In the result, all the appeals filed by the assessee are partly allowed

ITA 4293/DEL/2025[2016-17]Status: DisposedITAT Delhi20 Nov 2025AY 2016-17

Bench: Shri Satbeer Singh Godara & Shri S.Rifaur Rahman

For Appellant: Shri Dushayant Chaudhary, CAFor Respondent: Shri Jitender Singh, CIT DR

Section 142(1)Section 147Section 148

Subsequently, a search and seizure action was carried out on Mr. Himanshu Verma Group on 13.04.2017. Shri Himanshu Verma was an entry operator who provided accommodation entries in lieu of commission. Shri Himanshu Verma was found to be operating and managing more than 200 shell companies and he admitted that

Magnolia Martinique Clothing Private Limited, Delhi vs. DCIT, Central Circle 17, New Delhi, Delhi

In the result, all the appeals filed by the assessee are partly allowed

ITA 4292/DEL/2025[2015-16]Status: DisposedITAT Delhi20 Nov 2025AY 2015-16

Bench: Shri Satbeer Singh Godara & Shri S.Rifaur Rahman

For Appellant: Shri Dushayant Chaudhary, CAFor Respondent: Shri Jitender Singh, CIT DR

Section 142(1)Section 147Section 148