“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

Rupal Kashyap Mehta, Mumbai vs. DCIT, CC-4(1), Mumbai

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

ITA 6191/MUM/2024[2012-13]Status: DisposedITAT Mumbai27 Feb 2025AY 2012-13

Bench: SHRI AMIT SHUKLA (Judicial Member), SHRI GIRISH AGRAWAL (Accountant Member)

Section 10(38)Section 127(2)Section 132(4)Section 153ASection 153D

Q.No. 11 he has stated that the D. B. (International) Stock Brokers Limited is a paper company controlled and managed by various accommodation entry operators. Please offer your comments for this observation and state why the long term capital gain claimed as exempt u/s 10(38) by you, your wife ... scrip M/s Shree Nath Commercial & Finance Ltd. was included in the list of 84 companies whose share prices were manipulated by a syndicate of entry operators. The AO from pages 4-12 of the assessment order discussed the findings of the Investigation Wing, Kolkata, wherein the modus operandi of providing

Late Shri Haji Mohd. Dilshad Through L/H. Shri Dilnawaz & Mrs. Mehrunissa, Muzaffarnagar vs. ACIT, Muzaffarnagar

In the result, the appeal of the Revenue in ITA No

ITA 3555/DEL/2017[2013-14]Status: DisposedITAT Delhi27 Feb 2025AY 2013-14

Bench: Ms. Madhumita Roy & Shri Naveen Chandra

For Appellant: Ms. Rano Jain, AdvFor Respondent: Shri Rajesh Kumar Dhanesta, Sr. DR

Section 131Section 147Section 148

made purchases from two concerns, namely M/s Usha Trading and M/s Kumar Sales which were bogus and that they are being operated by entry operators Suresh Kumar Agarwal and Anuj Bukardiwala. Ultimately, the AO added the purchase made from M/s Usha Trading of Rs 1,75,94,841/- and from ... stated that the assessee is indulging in activity of bogus purchase as the parties from whom purchases are made is being operated by the entry operators. We find from the assessment order that the AO had made several efforts to examine the veracity of the information. The AO issued notices

Intimate Commotrade Pvt. Ltd., Kolkata vs. ITO, Ward-6(2), Kolkata

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

ITA 539/KOL/2024[2012-13]Status: DisposedITAT Kolkata26 Feb 2025AY 2012-13

Bench: Shri Duvvuru Rl Reddy, Vice-(Kz) & Shri Sanjay Awasthii.T.A. No. 539/Kol/2024 Assessment Year: 2012-2013 Intimate Commotrade Private Limited,……Appellant 5/1, 4Th Floor, Room No. 125, Clive Row, Kolkata-700001 [Pan:Aacci4983R] -Vs.- Income Tax Officer,……………………………....Respondent Ward-6(2), Kolkata, Aayakar Bhawan, P-7, Chowringhee Square, Kolkata-700069

Section 143(2)Section 144Section 148

used for providing accommodation entry. Whereas the appellant company had received accommodation entry Rs.12,23,00,000/- 3 Intimate Commotrade Private Limited through the entry operators, who facilitates such accommodation entry on receipt of commission only. Therefore, he pleaded to delete the addition made by the ld. Assessing Officer

Shri Sanjay Dhanraj Jain, Nagpur vs. Deputy Commissioner of Income Tax, Central Circle-1(3), Nagpur

ITA 55/NAG/2022[2012-13]Status: DisposedITAT Nagpur25 Feb 2025AY 2012-13

Section 132Section 133ASection 139(1)Section 143(1)Section 143(3)Section 153ASection 234A

Pramod Sharma and Shri. Pulak Bagchi who are alleged to be directors of the impugned company and employees of Shri. Praveen Agrawal who is entry operator. It is submitted that the statement of Shri. Pramod Sharma is recorded on 10-11-2012, ie, four years before the search action

ACIT-Central Circle -2(1), Nagpur vs. Shri Nandkumar Khattumal Harchandani, Nagpur

In the result, appeal of the Revenue stands dismissed

ITA 411/NAG/2019[2015-16]Status: DisposedITAT Nagpur25 Feb 2025AY 2015-16

Bench: Shri V. Durga Rao & Shri K.M. Roy, Accountant, Member

For Appellant: Shri Manoj G. MoryaniFor Respondent: Shri Sandipkumar Salunke

Section 10(38)Section 68

gains to beneficiaries. ix) On the facts and circumstances of the case & in law, the Ld. CIT(A) failed to appreciate the role of entry operators in artificially hiking the share price of M/s. ParagShilp Infrastructure & Services Ltd. to enable to assessee to legitimize his unaccounted fund ... learned AO in his order is totally different and irrelevant in the case of the assessee as - No evidence on record approaching to the Entry Operator by the assessee. - No nexus of any nature has been established between the Assessee and Entry Operators, Brokers, Sub-Brokers and other entities

ACIT-Central Circle -2(1), Nagpur vs. Shri Nandkumar Khattumal Harchandani, Nagpur

ITA 410/NAG/2019[2014-15]Status: DisposedITAT Nagpur25 Feb 2025AY 2014-15

Bench: Shri V. Durga Rao & Shri K.M. Roy, Accountant, Member

For Appellant: Shri Manoj G. MoryaniFor Respondent: Shri Sandipkumar Salunke

Section 10(38)Section 68

gains to beneficiaries. ix) On the facts and circumstances of the case & in law, the Ld. CIT(A) failed to appreciate the role of entry operators in artificially hiking the share price of M/s. Parag Shilp Infrastructure & Services Ltd. to enable to assessee to legitimize his unaccounted fund ... learned AO in his order is totally different and irrelevant in the case of the assessee as No evidence on record approaching to the Entry Operator by the assessee. No nexus of any nature has been established between the Assessee and Entry Operators, Brokers, Sub-Brokers and other entities

Manish Devendrakumar Shah, Ahmedabad vs. The ITO, Ward-5(3)(1), Ahmedabad

The appeal of the assessee is allowed in full

ITA 918/AHD/2024[2014-15]Status: DisposedITAT Ahmedabad25 Feb 2025AY 2014-15

Bench: Shri T.R. Senthil Kumar & Shri Makarand V. Mahadeokarआयकर अपील सं /Ita No.918/Ahd/2024 िनधा"रण वष" /Assessment Year : 2014-15 Manish Devendrakumar Shah The Ito बनाम/ 206, 2Nd Floor, Kalash 1 Ward-5(3)(1) V/S. Navrangpura Ahmedabad Ahmedabad – 380 009 "थायी लेखा सं./Pan: Aqjps 4226 K (अपीलाथ"/ Appellant) ("" यथ"/ Respondent) Assessee By : Shri S.N. Divatia, Ar & Shri Samir Vora, Ar Revenue By : Shri Rignesh Das, Sr.Dr सुनवाई की तारीख/Date Of Hearing : 20 /02/2025 घोषणा की तारीख /Date Of Pronouncement: 25/02/2025 आदेश/O R D E R Per Makarand V. Mahadeokar, Am:

For Appellant: Shri S.N. Divatia, AR &For Respondent: Shri Rignesh Das, Sr.DR

Section 10(38)Section 143(1)Section 147Section 250Section 68

intrinsic value, and there was evidence of pre-arranged transactions between known entities. The assessee had a direct nexus with the stockbrokers and entry operators, who were instrumental in manipulating the share prices to create fictitious long-term capital gains (LTCG). In the present case, the AO has not brought ... whereas in Swati Bajaj, the companies involved had no genuine business activity. In Swati Bajaj, the AO relied on detailed statements from entry operators, brokers, and promoters, confirming the manipulation of stock prices. In contrast, in the present case, the assessee was not provided with the investigation report or given

ACIT Circle-22(1), Mumbai vs. Nilesh Haresh Parwani, Mumbai

ITA 185/MUM/2025[2016]Status: DisposedITAT Mumbai25 Feb 2025

Bench: Shri Amarjit Singh & Shri Anikesh Banerjee

For Appellant: Shri Rakesh Joshi (Virtually present)For Respondent: Shri Leqaqut Ali, Sr. DR

Section 250

IN THE INCOME TAX APPELLATE TRIBUNAL, MUMBAI BENCH “B”, MUMBAI BEFORE SHRI AMARJIT SINGH, ACCOUNTANT MEMBER AND SHRI ANIKESH BANERJEE

DCIT, New Delhi vs. M/S Khemka Stuart Leisure Ltd., New Delhi

Appeals of the assessee are allowed

ITA 6215/DEL/2015[2008-09]Status: DisposedITAT Delhi25 Feb 2025AY 2008-09

Bench: Shri Mahavir Singh(), Ms. Madhumita Roy & Shri Avdhesh Kumar Mishra

For Appellant: Sh. Ruchesh Sinha, AdvFor Respondent: Sh. T. James Singson, CIT, DR

Section 11Section 127Section 132Section 139(1)Section 153ASection 153DSection 274

cash deposited in the bank amounting to Rs. 15,04,35,000/-. The second addition was made with regard to cash introduced via an entry operator i.e. one, Mr. Vipin Garg The amount added qua this aspect was pegged at Rs.1,54,07,100/-. 11. Despite these additions, which would

Ashok Vijaykumar Kotecha, Jalgaon vs. ACIT, Circle 1, Jalgaon

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

ITA 1453/PUN/2023[2011-12]Status: DisposedITAT Pune24 Feb 2025AY 2011-12

Bench: Shri R. K. Panda & Shri Vinay Bhamoreassessment Year : 2011-12

For Appellant: Shri Kishor B PhadkeFor Respondent: Shri Uma Shankar Prasad

Section 143(3)Section 147Section 148Section 153A

There is no date against the payment of Rs 6,20,00,000 made by the appellant to the entry operator. Therefore, it cannot be said that amount received back from the borrower was used for purchasing the long term capital gains. No telescopic benefit can therefore be granted

Mukesh Shah, HUF, Mumbai vs. ITO, Ward -17(2)(4), Mumbai

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

ITA 2941/MUM/2019[2014-15]Status: DisposedITAT Mumbai24 Feb 2025AY 2014-15

Bench: Shriamarjit Singh & Shri Anikesh Banerjee

For Appellant: Shri Shashank MehtaFor Respondent: Ms. Monika H. Pande,(SR AR)

Section 10(38)Section 139Section 143(3)Section 250Section 68Section 69C

also alleged that this share price was artificially rigged and manipulated beyond its normal pricing with connivance of share brokers with guidance of various entry operators wherein the illegal money was converted in legal money in the form of LTCG. Accordingly, the Ld.AO rejected the exemption under section

DCIT-Circle 7 Pune, Bodhi Tower Salisbury Park Pune vs. Trio Chemsucrotech Eng. Projects Pvt. Ltd, Pune

ITA 1047/PUN/2024[2010-11]Status: DisposedITAT Pune21 Feb 2025AY 2010-11

Section 143(3)

and to whomsoever it may concern. 14. We would also like to extract the copy of certificate issued by Mr

Sunil Gupta, Delhi vs. ACIT, Circle-55(1), New Delhi

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

ITA 634/DEL/2020[2012-13]Status: DisposedITAT Delhi21 Feb 2025AY 2012-13

Bench: Shri Vikas Awasthy & Shri Naveen Chandraadvantage India Vs. The Pr. C.I.T 101-102, Oriental House Central - 2 Gulmohar Enclave New Delhi New Delhi

For Appellant: Shri Sanjay Mehra, FCAFor Respondent: Shri Javed Akhtar, CIT [DR]

Section 127Section 127(2)Section 12ASection 13(1)(c)

maintaining and running Mobile Medical Units (MMUs) etc. The evidences revealed that funds so deposited are ultimately withdrawn in cash after layering through entry operators. Thus, the PCIT(C) established that the entire sequence i.e., incoming of funds and its so called application was nothing but transferring commission/kickbacks to Deepak ... been used for booking purchases/other expenses by M/s Accordis are the entities which existed only on the paper and are being controlled by one entry operator Mr. Sunil Khandelwal. Mr. Raman Kapoor has also accepted the fact that he had taken purchase entry through the entry operator and he uses

Manoj Madanlal Chhajed, Pune vs. The Assistant Commissioner of Income Tax, Central Circle-1(1), Pune

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

ITA 2017/PUN/2024[2011-12]Status: DisposedITAT Pune19 Feb 2025AY 2011-12

Bench: Shri R. K. Panda & Shri Vinay Bhamore

For Appellant: Shri Suhas P Bora, H G Sharma

Section 132Section 132(1)Section 142(1)Section 143(1)Section 143(2)Section 143(3)Section 147Section 148

statement that the assessee has duly admitted to the fact that it was in possession of unaccounted cash which was routed through the Kolkata entry operators as unsecured loans in its books of account. This means that the assessee was in possession of such cash at the time of credit ... unsecured loan transactions taken by him during the original assessment and the same were disclosed by him only when the statements of accommodation entry operators were confronted with him during the search proceedings where he has accepted that the true nature of loans was accommodation entries. Therefore, it is clear

Shri Manoj Madanlal Chhajed, Pune vs. The Assistant Commissioner of Income Tax, Central Circle-1(1), Pune

ITA 1178/PUN/2023[2011-12]Status: DisposedITAT Pune19 Feb 2025AY 2011-12

Bench: Shri R. K. Panda & Shri Vinay Bhamore

Section 132Section 132(1)Section 142(1)Section 143(1)Section 143(2)Section 143(3)Section 147Section 148

The DCIT, Central Circle-1(1), Ahmedabad vs. Shri Rajendra J Keshwani (HUF), Ahmedabad

The appeal of the Revenue is dismissed

ITA 30/AHD/2021[2015-16]Status: DisposedITAT Ahmedabad18 Feb 2025AY 2015-16

Bench: Ms. Suchitra Kamble & Shri Makarand V. Mahadeokarआयकर अपील सं /Ita No.30/Ahd/2021 िनधा"रण वष" /Assessment Year : 2015-16 The Dcit Shri Rajendra J. Keshwani बनाम/ Central Circle-1(1) (Huf) V/S. Ahmedabad-380 009 44, Asopalav Bungalows Nr.Muktidham Jain Temple Thaltej, Ahmedabad "थायी लेखा सं./Pan: Aaehk 1973 J अपीलाथ%/ (Appellant) &' यथ%/ (Respondent) Assessee By : Shri M.K. Patel, Advocate Revenue By : Shri Kavan Limbasiya, Sr.Dr सुनवाई की तारीख/Date Of Hearing : 12/02/2025 घोषणा की तारीख /Date Of Pronouncement: 18/02/2025 आदेश/O R D E R Per Makarand V. Mahadeokar, Am:

For Appellant: Shri M.K. Patel, AdvocateFor Respondent: Shri Kavan Limbasiya, Sr.DR

Section 10(38)Section 143(1)Section 143(2)Section 68

transactions. 3. The AO relied on various reports and investigations conducted by the Income Tax Department in Kolkata, Delhi, and Mumbai, which unearthed accommodation entry operations in penny stocks. The AO identified common features of such penny stock companies, which were present in KPL: 1. Preferential allotment or off-market ... sold them at a lower-than-peak price, indicating no price manipulation. The AO failed to establish any direct link between the assessee and entry operators or price rigging. Further, the assessee is a regular stock market investor with a history of trading activities, unlike in Swati Bajaj, where

Meena Hasmukh Savla, Matunga Mumbai vs. Assessment Unit, National Faceless Assessment Centre

In the result the appeal filed by the assessee is

ITA 2910/MUM/2024[2016-17]Status: DisposedITAT Mumbai18 Feb 2025AY 2016-17

Bench: Hon’Ble Shri Sandeep Gosain

Section 10Section 10(38)Section 143Section 143(1)Section 143(2)Section 147Section 148Section 151Section 250Section 68

confession of some persons which might have been given by fearful persons to avoid his own harassment by tax authorities some time called entry operator or accommodator. Perhaps confessional statement might have been made by some people for gaining some personal advantage from tax authorities like reward or soft corner

DCIT 19(1), Mumbai vs. Pavan Kumar B Chandan, Mumbai

In the result, the appeal of the Revenue is dismissed

ITA 2592/MUM/2023[2015-16]Status: DisposedITAT Mumbai18 Feb 2025AY 2015-16

Bench: Shri Narender Kumar Choudhry & Shri Prabhash Shankar

For Appellant: Shri Devendra Jain,ARFor Respondent: Shri Mahesh Pamnani (Sr.DR)

Section 143(3)Section 68Section 69

broker/other entities were involved in price manipulation in the scrip thereby confirming the investigation of the department that the scrip is utilized by entry operators for providing accommodation entries under the garb of LTCG by manipulating/rigging up the share price?" 4. "Whether on the facts and circumstances of the case ... investigation into 84 penny stocks which identified shares of STL as a penny stock. The AO took note of the modus operandi of the entry operators involved in facilitating bogus LTCG to beneficiaries like the assessee, which according to him is nothing but converting the black money of the beneficiaries

Chintan Shailesh Shah, Mumbai vs. ITO Ward-30(1)(2), Now ITO Ward-41(3)(1), Mumbai

In the result, the appeal filed by the assessee stands dismissed with no order as to cost

ITA 2469/MUM/2024[2014-15]Status: DisposedITAT Mumbai17 Feb 2025AY 2014-15

Bench: Hon’Ble Shri Sandeep Gosain & Shri Prabhash Shankarchintan Shailesh Shah Vs. Ito, Ward 30(1)(2) Rushikesh, Shanti Nagar, (Now Ward 41(3)(1)) Adarsh Dugdhalaya Kautilya Bhavan, Bkc, Malad (W), Mumbai – Bandra (E), Mumbai – 400064. 400051. Pan/Gir No. Amzps2768Q (Applicant) (Respondent)

Section 10(38)Section 133(6)Section 250Section 68

dealt with these penny stocks who were targeted. It is equally true invariably in all cases, the statement of the stock brokers, the entry operators or the Directors of the various penny stock companies does not directly implicate the assessee. If such being the situation, the assessee cannot be heard ... cases the assessee has been made known of the statement of the Director of the penny stock company or the stock broker, entry operator despite which those assessees could not make any headway. While on this issue, we need to consider as to whether and under what circumstances the right

DCIT-CC-7(3), Mumbai vs. M/S Lotus Buildspace LLP, Mumbai

In the result, all the appeals filed by the revenue are dismissed and the cross objections filed by the assessee are allowed

ITA 1484/MUM/2019[2013-14]Status: DisposedITAT Mumbai14 Feb 2025AY 2013-14

Bench: SHRI B.R. BASKARAN (Accountant Member), SHRI ANIKESH BANERJEE (Judicial Member)

For Respondent: Dr. K.R. Subhash (CIT-DR)

Section 132Section 143(2)Section 143(3)Section 153ASection 153A(1)(a)Section 250Section 68

been retracted by all of them. Further, the AO has made allegation that M/s. Satyam Projects Ltd is a company run by various entry operators but have failed to bring anything concrete on record. In fact, during the course of assessment proceedings, enquiries were made by the AO in form