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“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
62
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
60
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
55
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
55
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

Shashi Infra Construction Pvt. Ltd., Lucknow vs. ITO, Lucknow

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

ITA 353/LKW/2023[2016-17]Status: DisposedITAT Lucknow11 Sept 2025AY 2016-17

Bench: Shri Kul Bharat & Shri Anadee Nath Misshraassessment Year: 2016-17 Shashi Infra V. The Constructions Pvt Ltd Addl/Joint/Deputy/Asstt/Income 328B, 5Th Lane Rajendra Tax Officer, Lucknow Nagar, Lucknow-226004. National Faceless Assessment Centre Delhi Tan/Pan:Aaucs5802M (Appellant) (Respondent) Appellant By: Shri Saurabh Gupta, C.A. Respondent By: Shri R. K. Agarwal, Cit(Dr) O R D E R

For Appellant: Shri Saurabh Gupta, C.AFor Respondent: Shri R. K. Agarwal, CIT(DR)
Section 144Section 144BSection 147Section 148Section 253(3)Section 694ASection 69A

based companies. A list of 114 Calcutta based companies was provided which had given accommodation entries to such Surat based companies. Statements of many entry operators and dummy Directors recorded during various search and seizure operation, survey operation and Investigation were checked. The Assessing Officer thereupon proceeded to record that

Income Tax Officer 11(2)(1), Mumbai vs. Shrem Alloys Private Limited, Mumbai

In the result, all the appeals filed by the Revenue stand dismissed

ITA 2192/MUM/2025[2014-15]Status: DisposedITAT Mumbai10 Sept 2025AY 2014-15

Bench: SHRI AMIT SHUKLA (Judicial Member), SHRI ARUN KHODPIA (Accountant Member)

Section 143(3)Section 147Section 148Section 153ASection 68

Investigation Wing, buttressed by certain third-party statements, to the effect that the scrip of Nysaa Corporation Ltd. had been used by entry operators for providing bogus accommodation entries of long-term capital gains and short-term capital losses. 6. In the subsequent reassessment orders, the learned AO went ... loss of Rs. 1,87,66,336/-in the said transaction. The AO in the assessment order has relied on the statements of various entry operators such as Shri. Naresh Jain, Shri. Rakesh Shah, Shri. Hemant Sheth, & Shri. Bhupesh Rathod. On the basis of the said statements, the AO concluded

Income Tax Officer 11 (2) (1), Mumbai vs. Everfine Alloys Private Limited, Mumbai

In the result, all the appeals filed by the Revenue

ITA 2186/MUM/2025[2015-16]Status: DisposedITAT Mumbai10 Sept 2025AY 2015-16
Section 143(3)Section 147Section 148Section 153ASection 68

Investigation Wing, buttressed by certain third-party statements, to the effect that the scrip of Nysaa Corporation Ltd. had been used by entry operators for providing bogus accommodation entries of long-term capital gains and short-term capital losses. 6. In the subsequent reassessment orders, the learned AO went ... business loss of Rs.1,87,66,336/-in the said transaction. The AO in the assessment order has relied on the statements of various entry operators such as Shri. Naresh Jain, Shri. Rakesh Shah, Shri. Hemant Sheth, & Shri. Bhupesh Rathod. On the basis of the said statements, the AO concluded

Income Tax Officer, Mumbai vs. Everfine Alloys Private Limited, Mumbai

In the result, all the appeals filed by the Revenue stand dismissed

ITA 2185/MUM/2025[2013-14]Status: DisposedITAT Mumbai10 Sept 2025AY 2013-14

Bench: SHRI AMIT SHUKLA (Judicial Member), SHRI ARUN KHODPIA (Accountant Member)

Section 143(3)Section 147Section 148Section 153ASection 68

Investigation Wing, buttressed by certain third-party statements, to the effect that the scrip of Nysaa Corporation Ltd. had been used by entry operators for providing bogus accommodation entries of long-term capital gains and short-term capital losses. 6. In the subsequent reassessment orders, the learned AO went ... loss of Rs. 1,87,66,336/-in the said transaction. The AO in the assessment order has relied on the statements of various entry operators such as Shri. Naresh Jain, Shri. Rakesh Shah, Shri. Hemant Sheth, & Shri. Bhupesh Rathod. On the basis of the said statements, the AO concluded

DCIT, Circle- 19(1), Delhi vs. Paramount Propbuild Pvt. Ltd., Delhi

In the result, the appeal of the Revenue is dismissed

ITA 2027/DEL/2025[2017-18]Status: DisposedITAT Delhi10 Sept 2025AY 2017-18

Bench: Shri Satbeer Singh Godara & Shri Manish Agarwaldcit, Paramount Propbuild Pvt. Circle-19(1), Ltd. Delhi. Vs. 208, 2Nd Floor, Sikka Mansion, Lsc, Savita Vihar, New Delhi-110092. Pan:Aadcp522P (Appellant) (Respondent) Assessee By Dr. Rakesh Gupta, Adv. & Shri Somil Aggarwal, Adv. Department By Shri Pradumna Kumar Singh, Sr. Dr Date Of Hearing 03.09.2025 Date Of Pronouncement 03.09.2025 O R D E R Per Manish Agarwal, Am: This Appeal Is Filed By The Revenue Against The Order Of Commissioner Of Income Tax (Appeals), 29, Delhi In Appeal No. Cit(A), Delhi-7/10457/2019- 20 Dated 24.01.2025 U/S 250 Of The Income Tax Act, 1961 Arising Out Of Order Passed U/S 143(3) Dated 08.04.2021 For Assessment Year 2017-18. 2. Brief Facts Of The Case Are That Assessee Is A Company & E-Filed Its Return Of Income On 21.11.2018 Declaring Total Income At Rs.2,80,29,572/-. The Case Of The Assessee Was Taken Up For Scrutiny & The Assessment Was Completed Wherein Disallowance Of Rs. 3,23,93,370/- Was Made Towards The Interest Paid On Funds Borrowed From Two Entities Namely M/S Sarvottam Securities Pvt. Ltd. & M/S Upaj Leasing Finance Company Ltd. By Holding That The Loan Taken From These Two Companies As Bogus. The Ld. Cit(A) Deleted The Disallowance So Made By Observing That Loans Taken From These Two Companies On Which The Interest Paid Is Disallowed In The Year Under Appeal Was Not Disputed By The Revenue Nor Held As Bogus In The Year When They

Section 143(3)Section 148Section 148ASection 250Section 263

Sarvottam Securities Pvt. Ltd. and M/s Upaj Leasing & Finance Company Ltd. respectively. Since the aforesaid companies were found to be the shell companies of entry operator Himanshu Verma, the interest debited by the appellant was not held to be bona fide and added back by the AO. 6.2 During ... information, it is noticed that the assessee company is one of the beneficiary of receiving accommodation entries from Sh. Himanshu verma, an entry operator. 2. Accordingly a letter no. ITBA/COM/F/17/2022-23/1043124311(1) u/s 148A(b) in consequence to the Hon'ble SC Order dated 04.05.2022 for the Assessment Year

Jayesh Khimji Khimasiya HUF, Jamnagar vs. Office of Principal Commissioner of Income-Tax, Jamnagar

ITA 6/RJT/2024[2012-13]Status: DisposedITAT Rajkot09 Sept 2025AY 2012-13

Bench: Dr. Arjun Lal Saini & Shri Dinesh Mohan Sinha

Section 10(38)Section 147Section 263

groups, in fact they are of people of no means. (6). Price escalation through synchronized trading within limited parties, mostly entities controlled by the entry operators. (7). Statement recorded during search or survey operations conducted by the investigation wing clearly established the facts that price of the shares are manipulated

Bhanuben Mansukhlal Khimasiya, Jamnagar vs. Office of Principal Commissioner of Income-Tax, Jamnagar

ITA 5/RJT/2024[2012-13]Status: DisposedITAT Rajkot09 Sept 2025AY 2012-13

Bench: Dr. Arjun Lal Saini & Shri Dinesh Mohan Sinha

Section 10(38)Section 147Section 263

groups, in fact they are of people of no means. (6). Price escalation through synchronized trading within limited parties, mostly entities controlled by the entry operators. (7). Statement recorded during search or survey operations conducted by the investigation wing clearly established the facts that price of the shares are manipulated

Mansukhlal Khimji Khimasiya, Jamnagar vs. Office of Principal Commissioner of Income-Tax, Jamnagar

ITA 4/RJT/2024[2013-14]Status: DisposedITAT Rajkot09 Sept 2025AY 2013-14

Bench: Dr. Arjun Lal Saini & Shri Dinesh Mohan Sinha

Section 10(38)Section 147Section 263

groups, in fact they are of people of no means. (6). Price escalation through synchronized trading within limited parties, mostly entities controlled by the entry operators. (7). Statement recorded during search or survey operations conducted by the investigation wing clearly established the facts that price of the shares are manipulated

Mansukhlal Khimji Khimasiya HUF, Jamnagar vs. Office of Principal Commissioner of Income-Tax, Jamnagar

ITA 3/RJT/2024[2012-13]Status: DisposedITAT Rajkot09 Sept 2025AY 2012-13

Bench: Dr. Arjun Lal Saini & Shri Dinesh Mohan Sinha

Section 10(38)Section 147Section 263

groups, in fact they are of people of no means. (6). Price escalation through synchronized trading within limited parties, mostly entities controlled by the entry operators. (7). Statement recorded during search or survey operations conducted by the investigation wing clearly established the facts that price of the shares are manipulated

Income Tax Officer, Infinity Towers, Sankarmatham Road vs. Ammaji Chennupati, Rajeevnagar, Kurmannapalem

In the result, the appeal of the revenue is dismissed, while the additional ground of cross-objection of the assessee is allowed in terms of our aforesaid observations

ITA 441/VIZ/2024[2017-18]Status: DisposedITAT Visakhapatnam09 Sept 2025AY 2017-18

Bench: Us:

Section 10(38)Section 147Section 148Section 148ASection 69

that was shared with him by the DDIT(Inv.), Mumbai, made an addition on account of the accommodation entry that was received from an entry operator, viz. Shri. Naresh Jain. Accordingly, the A.O vide his order passed u/s 147 r.w.s 144 r.w.s 144B of the Act, dated 08.05.2023, determined

Sanjay Singal (HUF), New Delhi vs. Deputy Commissioner of Income Tax, Central Circle-1, Chandigarh

In the result, assessee’s appeals are allowed

ITA 221/CHANDI/2025[2016-17]Status: DisposedITAT Chandigarh09 Sept 2025AY 2016-17

Bench: SHRI. RAJPAL YADAV (Vice President), SHRI. KRINWANT SAHAY (Accountant Member)

For Appellant: Shri Ashwani Kumar, C.A and Ms. Deepali Aggarwal, C.AFor Respondent: Smt. Kusum Bansal, CIT, DR
Section 10(38)Section 132Section 250(6)Section 68Section 69C

necessary that having contract notes, demat accounts and bank statements, the transactions carried out on stock exchange cannot be manipulated as admitted by the entry operator. Thus, it is seen that the appellant failed to explain the nature and source of credits in the bank account. The commission rates charged

Sanjay Singal, New Delhi vs. Deputy Commissioner of Income Tax, Central Circle-1, Chandigarh

In the result, assessee’s appeals are allowed

ITA 220/CHANDI/2025[2016-17]Status: DisposedITAT Chandigarh09 Sept 2025AY 2016-17

Bench: SHRI. RAJPAL YADAV (Vice President), SHRI. KRINWANT SAHAY (Accountant Member)

For Appellant: Shri Ashwani Kumar, C.A and Ms. Deepali Aggarwal, C.AFor Respondent: Smt. Kusum Bansal, CIT, DR
Section 10(38)Section 132Section 250(6)Section 68Section 69C

necessary that having contract notes, demat accounts and bank statements, the transactions carried out on stock exchange cannot be manipulated as admitted by the entry operator. Thus, it is seen that the appellant failed to explain the nature and source of credits in the bank account. The commission rates charged

Aniket Singal, New Delhi vs. Deputy Commissioner of Income Tax, Central Circle-1, Chandigarh

In the result, assessee’s appeals are allowed

ITA 219/CHANDI/2025[2015-16]Status: DisposedITAT Chandigarh09 Sept 2025AY 2015-16

Bench: SHRI. RAJPAL YADAV (Vice President), SHRI. KRINWANT SAHAY (Accountant Member)

For Appellant: Shri Ashwani Kumar, C.A and Ms. Deepali Aggarwal, C.AFor Respondent: Smt. Kusum Bansal, CIT, DR
Section 10(38)Section 132Section 250(6)Section 68Section 69C

necessary that having contract notes, demat accounts and bank statements, the transactions carried out on stock exchange cannot be manipulated as admitted by the entry operator. Thus, it is seen that the appellant failed to explain the nature and source of credits in the bank account. The commission rates charged

Aarti Singal, New Delhi vs. Deputy Commissioner of Income Tax, Central Circle-1, Chandigarh

In the result, assessee’s appeals are allowed

ITA 218/CHANDI/2025[2016-17]Status: DisposedITAT Chandigarh09 Sept 2025AY 2016-17

Bench: SHRI. RAJPAL YADAV (Vice President), SHRI. KRINWANT SAHAY (Accountant Member)

For Appellant: Shri Ashwani Kumar, C.A and Ms. Deepali Aggarwal, C.AFor Respondent: Smt. Kusum Bansal, CIT, DR
Section 10(38)Section 132Section 250(6)Section 68Section 69C

necessary that having contract notes, demat accounts and bank statements, the transactions carried out on stock exchange cannot be manipulated as admitted by the entry operator. Thus, it is seen that the appellant failed to explain the nature and source of credits in the bank account. The commission rates charged

Aarti Singal, New Delhi vs. Deputy Commissioner of Income Tax, Central Circle-1, Chandigarh

In the result, assessee’s appeals are allowed

ITA 217/CHANDI/2025[2015-16]Status: DisposedITAT Chandigarh09 Sept 2025AY 2015-16

Bench: SHRI. RAJPAL YADAV (Vice President), SHRI. KRINWANT SAHAY (Accountant Member)

For Appellant: Shri Ashwani Kumar, C.A and Ms. Deepali Aggarwal, C.AFor Respondent: Smt. Kusum Bansal, CIT, DR
Section 10(38)Section 132Section 250(6)Section 68Section 69C

necessary that having contract notes, demat accounts and bank statements, the transactions carried out on stock exchange cannot be manipulated as admitted by the entry operator. Thus, it is seen that the appellant failed to explain the nature and source of credits in the bank account. The commission rates charged

Deputy Commissioner of Income Tax, Central Circle 3(2), Kolkata, Aayakar Bhawan Poorva vs. Bhagwan Das Agarwal, Kolkata

In the result, appeal of the revenue is dismissed

ITA 1254/KOL/2025[2014-15]Status: DisposedITAT Kolkata09 Sept 2025AY 2014-15

Bench: Shri George Mathan & Shri Rakesh Mishraआयकर अपील सं/Ita No.1254/Pat/2025 (निर्धारण वर्ा / Assessment Year : 2014-2015) Dcit, Central Circle-3(2), Vs Bhagwan Das Agarwal, Kolkata 21, Hemant Basu Sarani, Dalhousie, Kolkata-700001 Pan No. :Afjpa 9084 Q (अपीलधर्थी /Appellant) (प्रत्यर्थी / Respondent) .. रधजस्व की ओर से /Revenue By : Shri Raja Sengupta, Cit-Dr निर्धाररती की ओर से /Assessee By : Shri Devesh Poddar, Advocate सुनवाई की तारीख / Date Of Hearing : 09/09/2025 घोषणा की तारीख/Date Of Pronouncement : 09/09/2025 आदेश / O R D E R Per George Mathan, Jm: This Is An Appeal Filed By The Revenue Against The Order Passed By The Ld.Cit(A), National Faceless Appeal Centre (Nfac), Delhi, Dated 24.03.2025 For The Assessment Year 2014-2015. 2. Shri Raja Sengupta, Ld. Cit-Dr Appeared On Behalf Of The Revenue & Shri Devesh Poddar, Ld. Ar Appeared On Behalf Of The Revenue. 3. A Perusal Of The Facts Of The Present Case Shows That The Order Of The Ld. Cit(A) Dated 24.03.2025 Has Been Received In The Office Of Pr.Cit, Central-2, Kolkata On 24.03.2025. The Limitation For Filing The Appeal Expired On 23.05.2025 & The Appeal Has Been Filed On 09.06.2025. Thus, There Is A Delay Of 21 Days In Filing The Appeal By The Revenue. In This Regard, The Revenue Has Filed A Condonation Application Stating Therein As Under :-

For Appellant: Shri Devesh Poddar, AdvocateFor Respondent: Shri Raja Sengupta, CIT-DR
Section 153ASection 3Section 68

order that the assessee was a beneficiary of the trade reversal in illiquid options contracts which was being carried out by share brokers and entry operators acting in tandem to provide bogus profits and losses in lieu of commission. The Hon'ble Supreme Court through its judgment dated 08/02/2018

DCIT, Circle- 19(1), Delhi vs. Paramount Propbuild Pvt. Ltd., Delhi

Appeal is dismissed

ITA 2072/DEL/2025[2018-19]Status: DisposedITAT Delhi09 Sept 2025AY 2018-19

Bench: Shri Satbeer Singh Godara & Shri Manish Agarwalassessment Year: 2018-19 Vs. Paramount Propbuild Pvt. Ltd., Dcit, Circle-19(1), 208, 2Nd Floor, Sikka Mansion, New Delhi Lsc, Savita Vihar, Delhi Pan: Aadcp5228P (Appellant) (Respondent) Assessee By Sh. Deepesh Garg, Adv. Department By Sh. Manish Gupta, Sr. Dr

Section 143(3)Section 148Section 148ASection 263

Sarvottam Securities Pvt. Ltd. and M/s Upaj Leasing & Finance Company Ltd. respectively. Since the aforesaid companies were found to be the shell companies of entry operator Himanshu Verma, the interest debited by the appellant was not held to be bona fide and added back by the AO. 6.2 During ... information, it is noticed that the assessee company is one of the beneficiary of receiving accommodation entries from Sh. Himanshu verma, an entry operator. 2. Accordingly a letter no. ITBA/COM/F/17/2022- 23/1043124311(1) u/s 148A(b) in consequence to the Hon'ble SC Order dated 04.05.2022 for the Assessment Year

Income Tax Officer, Ward-1(1), Kolkata vs. Avinash Commercial Private Limited, Kolkata

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

ITA 1603/KOL/2024[2012-13]Status: DisposedITAT Kolkata08 Sept 2025AY 2012-13

Bench: Sonjoy Sarma & Sri Rakesh Mishra

Section 143(2)Section 143(3)Section 147Section 148Section 149Section 250Section 69

transaction. It would be very difficult to gather direct proof of the meeting of minds of those brokers or sub-brokers or middlemen or entry operators and therefore, the test to be applied is the test of preponderance of probabilities to ascertain as to whether there has been violation

Narayan Suppliers Pvt. Ltd., Kolkata vs. I.T.O., Ward - 6(3), Kolkata

In the result, appeal of the assessee is dismissed

ITA 1077/KOL/2024[2011-2012]Status: DisposedITAT Kolkata08 Sept 2025AY 2011-2012

Bench: Shri George Mathan & Shri Rakesh Mishra

For Appellant: Shri Avijit Ghoshal, ARFor Respondent: Shri Raja Sengputa, CIT-DR
Section 10(38)

Meenakshi Overseas 395 ITR 677; where AO solely on the basis of information received from investigation wing concluded that assessce was a beneficiary of entry operators, without further verification, examination or any other exercise and issued notice under section 148. Assessee challenged the notice. Held: "Apparently, reasons to believe

Laurels Properties Private Limited, Delhi vs. DCIT CC-1(4), Mumbai

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

ITA 1179/MUM/2025[2015-16]Status: DisposedITAT Mumbai05 Sept 2025AY 2015-16

Bench: Hon’Ble Shri Sandeep Gosain & Shri Prabhash Shankar

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