“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

ITO -24(2)(1), Mumbai, Piramal Chambers vs. Kailash Chandra Gupta, HUF, Mumbai

ITA 4013/MUM/2023[2012-13]Status: DisposedITAT Mumbai26 Jul 2024AY 2012-13

Section 10(38)Section 143(1)Section 143(2)Section 148

sent by the Kolkata Investigation Wing after verification with the sworn statements and seized material found during the search and seizure operations on various entry operators, the Ld. AO has mentioned. He relied on the case of M/s. Motilal Padampat Udyog Ltd. Vs. CIT 160 Taxman 233 for the proposition ... from this, the AO is of the opinion that such transactions cannot be accommodated without payment of commission of a minimum of 3% to entry operators and hence he has added Rs. 1,55,243/- u/s. 69C of the Act. After making the addition, the AO has initiated penalty proceedings

Kaushik Chandravadan Parikh, Mumbai vs. NFAC, Delhi

ITA 2064/MUM/2023[2011-12]Status: DisposedITAT Mumbai26 Jul 2024AY 2011-12

Bench: Ms. Kavitha Rajagopal (Jm) & Shri Omkareshwar Chidara (Am)

Section 10(38)Section 132Section 68

company cannot be an accident or windfall but because of manipulation in price of shares in a pre-planned manner by interested broker and entry operators. f) The Ld. CIT(A) held that initial onus lies on the assessee to prove how the share price M/s. PIL went up astronomically ... without adducing any evidence alleged that the assessee worked out an arrangement whereby the price of the shares were rigged and with the entry operator by routing cash earned the alleged long term capital gains (LTCG) which are exempt from payment of tax. 8. The Commissioner (Appeals) ought to have

Dee Are Texfab Pvt. Ltd., Ahmedabad vs. The PCIT, Ahmedabad-1, Ahmedabad

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

ITA 743/AHD/2024[2014-15]Status: DisposedITAT Ahmedabad25 Jul 2024AY 2014-15

Bench: Shri Siddhartha Nautiyal & Shri Makarand V. Mahadeokarआयकर अपील सं /Ita No.743/Ahd/2024 "नधा"रण वष" /Assessment Year : 2014-15 Dee Are Texfab Pvt.Ltd. The Pcit 149, New Cloth Market बनाम/ Ahmedabad-1 O/S. Raipur Gate Raipur V/S. Ahmedabad – 380 002 (Gujarat) "थायी लेखा सं./Pan: Aaecd 5136 H (अपीलाथ"/ Appellant) …. ("" यथ"/ Respondent) Assessee By : Shri Chetan Agarwal, Ar Revenue By : Shri Kamlesh Makwana, Cit-Dr सुनवाई क" तार"ख/Date Of Hearing : 22/07/2024 घोषणा क" तार"ख /Date Of Pronouncement: 25/07/2024 आदेश/O R D E R Per Shri Makarand V. Mahadeokar, Am: This Appeal Is Filed By The Assessee Against The Order Dated 28/03/2024 Passed By The Principal Commissioner Of Income Tax, Ahmedabad [Hereinafter Referred To As “The Pr.Cit(A)” In Short] Arising Out Of The Assessment Order Dated 27/03/20223 Passed By The Assessing Officer (Ao) Under Section 147 Read With Section 144B Of The Income Tax Act, 1961 (Hereinafter Referred To As "The Act") Relevant To The Assessment Year (Ay) 2014-15. Dee Are Texfab Pvt.Ltd. Vs. The Pr.Cit Asst. Year : 2014-15

For Appellant: Shri Chetan Agarwal, ARFor Respondent: Shri Kamlesh Makwana, CIT-DR

Section 132Section 142(1)Section 144BSection 147Section 148Section 263

that the case of the assessee was reopened on the basis of information of accommodation entries totalling to Rs.1,36,02,120/- from the entry operator Sanjay Govindram Agrawal, but concluded that the AO has not made any addition despite availability of specific information. He further concluded that there

Gipskarton India Private Limited, New Delhi vs. ACIT, Central Circle-7, New Delhi

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

ITA 1475/DEL/2023[2021-22]Status: DisposedITAT Delhi24 Jul 2024AY 2021-22

Bench: Shri Saktijit Dey & Shri Naveen Chandra

For Appellant: Ms. Rano Jain, AdvFor Respondent: Shri T James Singson, CIT-DR

Section 132(4)Section 69A

employees who had already left the assessee was recorded. In the case of Best Infrastructure, Shri Tarun Goyal , whose statement was recorded was an entry operator. In Sri Ramdas Motor Transport Ltd case, the issue decided was where no incriminating material is found, the powers u/s 132(4) cannot

Valaka Engineering Private Limited, Kolkata vs. ACIT, Central Circle-16 (Now CC-20), Delhi

In the result, Appeal filed by the Department is dismissed

ITA 183/DEL/2021[2017-18]Status: DisposedITAT Delhi24 Jul 2024AY 2017-18

Bench: or at the time of hearing.”

Section 133ASection 142(1)Section 143(2)Section 143(3)Section 68

Vijaypath Infrastructure Pvt. Ltd.(ii) Careful Engineering Pvt. Ltd.(iii) Suniyojit Hirise Ltd. and (iv) Careful Developers Pvt. Ltd. The said Companies are the entry operators, the amount claimed to have been credited/received have not been proved satisfactorily, therefore, submitted that the grounds of Appeal of the assessee requires ... been able to prove purchase transactions of these shares and the sales transactions of shares to the above mentioned companies of the entry operator, the amounts Page 8 of 17 ITA Nos.183 & 1087/Del/2021 Volaka Engineering Pvt. Ltd. vs. ACIT & DCIT claimed to have been credited/received have not been satisfactorily

DCIT, CC-20, New Delhi vs. Valaka Engineering Private Limited, Kolkata

In the result, Appeal filed by the Department is dismissed

ITA 1087/DEL/2021[2017-18]Status: DisposedITAT Delhi24 Jul 2024AY 2017-18

Bench: or at the time of hearing.”

Section 133ASection 142(1)Section 143(2)Section 143(3)Section 68

Ashok Sethia (Erstwhile Karta of Ashok Sethia (HUF), Kolkata vs. ITO, Ward-43(1), Kolkata

ITA 132/KOL/2024[2012-13]Status: DisposedITAT Kolkata23 Jul 2024AY 2012-13

Bench: Dr. Manish Borad & Shri Pradip Kumar Choubeyi.T.A. No.132/Kol/2024 Assessment Year: 2012-13

Section 143(2)Section 144Section 147Section 148Section 171Section 250

AACD3618F, a search and seizure, operation was carried out on 13.04.2017 in the case of Sri Himanshu Verma (entry operator), who admitted on oath that he had maintained 300 shell companies/ concerns for providing accommodation entries in lieu of commission. 18 such entities are reflected at pages

Gilt Commodities Pvt. Ltd., Kolkata vs. I.T.O., Ward-3(1), Kolkata

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

ITA 1447/KOL/2019[2014-15]Status: DisposedITAT Kolkata23 Jul 2024AY 2014-15

Bench: Sri Rajpal Yadav, Vice- & Sri Sanjay Awasthi

ground on which the ITAT found fault with the additions made by the AO was that reliance was placed on statement of 'so called entry operator' to justify the additions under sections 68 and 69 of the IT Act. These statements were recorded on various dates in some other proceedings ... list of the persons whose statement was allegedly recorded and who in their statement have admitted of price rigging, the names of share brokers, entry operators and exit providers have been mentioned. The facts on the file itself show that there was meeting of minds of the entry operators

Mrs. Neelam Agrawal, Kolkata vs. ITO, Ward-37(1), Kolkata

In the result, appeal of the assessee is allowed

ITA 756/KOL/2024[2015-16]Status: DisposedITAT Kolkata22 Jul 2024AY 2015-16

Bench: Dr. Manish Borad & Shri Pradip Kumar Choubeyi.T.A. No.756/Kol/2024 Assessment Year: 2015-16 Mrs. Neelam Agarwal ………. Appellant (Pan: Adcpa3772G) Vs. Income Tax Officer, Ward-37(1), Kolkata. ………… Respondent Appearances By: Shri Sunil Surana, Ar Appeared For Appellant. Shri Abhijit Kundu, , Addl. Cit, Dr Appeared For Respondent. Date Of Concluding The Hearing : 03.07.2024 Date Of Pronouncing The Order : 22.07.2024 Order Per Manish Borad: This Appeal Filed By The Assessee Pertaining To The Assessment Year (In Short “Ay”) 2015-16 Is Directed Against The Revision Order Passed U/S 263 Of The Income Tax Act, 1961 In Short The “Act”) By Ld. Pr. Commissioner Of Income-Tax, Kolkat-13 [In Short Ld. “Pr. Cit”] Dated 15.03.2024 Arising Out Of The Assessment Order U/S 147 R.W.S. 144B Of The Act By Ao, Nfac, Delhi Dated 27.03.2022. 2. Grounds Of Appeal Raised By The Assessee Read As Under: “1. For That The Ld. Pcit Erred In Revising The Reassessment Order Which Was Itself Invalid & Bad In Law As Sanction For Reopening Of Assessment Proceedings Was Not Taken From Prescribed Authority As Per Section 151. I.T.A. No. 756/Kol/2024 Neelam Agarwal, Ay : 2015-16

Section 144BSection 147Section 148Section 151Section 263

from Investigation Wing. No verification has been carried out by Ld. AO to unearth any tangible material. Neither the name of any broker or entry operator has been spelt out in the reasons nor any statement was collected where the assessee was named as a beneficiary. Reopening is simply based

Deepa Gupta, Hyderabad vs. ACIT, Central Circle-3(1), Hyderabad

In the result, all the appeals are allowed

ITA 59/HYD/2023[2012-13]Status: DisposedITAT Hyderabad18 Jul 2024AY 2012-13

Bench: Shri Manjunatha G. & Shri K.Narasimha Chary

For Appellant: Advocate Narahari BiswalFor Respondent: Shri CH Rajeswara Reddy, DR

Section 10(38)Section 132Section 143Section 143(3)Section 153ASection 68

Learned DR further submitted that there is incriminating material available in this case in the form of the statements made by various entry operators and also the statement of the assessees in these cases. 9. We have gone through the record in the light of the submissions made on either

Veenapani Investments Private Limited, Mumbai vs. ITO 13(3)(1), Mumbai

ITA 193/MUM/2024[2013-14]Status: DisposedITAT Mumbai16 Jul 2024AY 2013-14

Bench: Shri Pavan Kumar Gadale & Shri Girish Agrawalito 13(3)(1), Veenapani Investments Vs. Aayakar Bhavan, Private Limted, Mumbai.400020. Flat No. 302, B–Wing, Garden Court Co–Op Society Ltd, Amrutwani Road, Bhayender (W), Mumbai-401101. Pan/Gir No. Aaccv1684Q (अपीलाथ"/Applicant) (""यथ"/Respondent)

Section 143(3)Section 148Section 271(1)(c)Section 68

some of the corporate entities were found to have been controlled and operated by Shri Pravin Kumar Jain, who was one of the leading entry operator. For the other corporate entities, it was found that the assessee has obtained loan from these companies which was arranged by Shri Rakesh Doshi

Nitesh Rajhans Singh, Mumbai vs. The Income Tax Officer -26(2)(3), Mumbai

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

ITA 4114/MUM/2023[BAMPS4588L]Status: DisposedITAT Mumbai15 Jul 2024

Bench: Shri Pavan Kumar Gadale & Ms Padmavathy S

For Appellant: Shri Rajiv Khandelwal &For Respondent: Shri Laxmi Kant.Sr.DR

Section 10(38)Section 148Section 68Section 69C

shares under section 10(38) - Assessing Officer rejected assessee's plea and made additions under sections 68 and 69 by relying on statements from 'entry operators' On appeal, Commissioner (Appeals) accepted assessee's claim, noting that shares were purchased via Account Payee Cheques, held in a Demat Account for over ... transaction tax Tribunal upheld Commissioner (Appeal)'s decision, emphasizing assessee's right to correct mistakes and criticized Assessing Officer's reliance on statements from 'entry operators' to support additions under sections 68 and 69 as those statements were recorded in unrelated proceedings before survey on assessee, and assessee

DCIT Central Circle 2(1), Chennai vs. M/S. Kag India Pvt. Ltd, Chennai

The appeal stand dismissed

ITA 669/CHNY/2023[2012-13]Status: DisposedITAT Chennai10 Jul 2024AY 2012-13

Bench: Hon’Ble Shri Manoj Kumar Aggarwal, Am & Hon’Ble Shri Manu Kumar Giri, Jm आयकरअपीलसं./ Ita No.669/Chny/2023 (िनधा9रणवष9 / Assessment Year: 2012-13) Dcit M/S. Kag India Private Limited बनाम/ Central Circle-2(1), 264/15-1, Sathiyanathan Complex, Chennai. Velachery Road,East Tambaram, Vs. Chennai-600 059. "थायीलेखासं./जीआइआरसं./Pan/Gir No.Aadck-5381-Q (अपीलाथ"/Appellant) : (" थ" / Respondent) अपीलाथ"कीओरसे/ Appellant By : Shri Y. Sridhar (Fca)- Ld.Ar " थ"कीओरसे/Respondent By : Shri Nilay Baran Som (Cit)-Ld. Dr सुनवाईकीतारीख/Date Of Hearing : 18-06-2024 घोषणाकीतारीख /Date Of Pronouncement : 10-07-2024 आदेश / O R D E R

For Appellant: Shri Y. Sridhar (FCA)- Ld.ARFor Respondent: Shri Nilay Baran Som (CIT)-Ld. DR

Section 143(3)Section 153ASection 153A(1)Section 68

assessee company brought back his unaccounted cash generated in the form of share capital / share premium by routing through shell companies managed by entry operators. The Ld.CIT(A) failed to appreciate that there was existence of an asset in the form of unaccounted cash, which have been converted as share ... there is no liability on the part of the assessee. 2.3 The Ld.CIT(A) failed to appreciate that search operation in the case of entry operators clearly revealed the modus operandi adopted by them and M/s. KAG India Pvt Ltd introduced share capital by issue of shares to shell companies

Antony Leo Sequeira, Mumbai vs. Assistant Commissioner of Income Tax, Central Circle-2(1), Mumbai

In the result, Grounds taken by the assessee are dismissed

ITA 2010/MUM/2023[2014-2015]Status: DisposedITAT Mumbai10 Jul 2024AY 2014-2015

Bench: Shri Anikesh Banerjee & Shri Gagan Goyal

For Appellant: Shri K. Gopal & Shri Om Kandalkar , Ld. ARFor Respondent: Shri Ajay Chandra & Shri Manoj Kumar

Section 132Section 148Section 250Section 68

paper for manipulation and that accounts are fabricated and RIL is a bogus paper company; • As per the statement of Mr. Naresh Jain, entry operator of the scrip RIL, he explained the entire process of synchronised trading by way of artificial increase clients against receipt of cash from them ... 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

Alosha Marketing Pvt. Ltd., Kolkata vs. ACIT, Cir. 4(1), Kolkata

In the result, the appeal of the assessee is allowed

ITA 356/KOL/2024[2011-12]Status: DisposedITAT Kolkata08 Jul 2024AY 2011-12

Bench: Dr. Manish Borad (Accountant Member)

Section 143(1)(a)Section 143(2)Section 147Section 148

conducted extensive investigation in the matter of tax evasion by some individuals/entities by showing income from LTCG, which is actually bogus, perpetrated through accommodation entry operators. In the entire scenario, it is found that the promoters of the penny stocks, the share brokers and the entry operators are involved ... conducted extensive investigation in the matter of tax evasion by some individuals/entities by showing income from LTCG, which is actually bogus, perpetrated through accommodation entry operators. In the entire scenario, it is found that the promoters of the penny stocks, the share brokers and the entry operators are involved

Assistant Commissioner of Income Tax, Circle-46(1), Delhi, New Delhi vs. Shri Deepak Gambhir, New Delhi

In the result, the appeal of the revenue is dismissed

ITA 2466/DEL/2023[2017-18]Status: DisposedITAT Delhi08 Jul 2024AY 2017-18

Bench: Shri Kul Bharat & Shri M. Balaganeshacit, Vs. Shri Deepak Gambhir, Circle-46(1), 68/8, Nea, Near Sindhi New Delhi Park, Old Rajendra Nagar, New Delhi (Appellant) (Respondent) Pan:Aakpg2768D Assessee By : Shri Ved Jain, Adv Ms. Uma Upadhyay, Ca Revenue By: Shri Vivek Kumar Upadhyay, Sr. Dr Date Of Hearing 09/04/2024 Date Of Pronouncement 08/07/2024

For Appellant: Shri Ved Jain, AdvFor Respondent: Shri Vivek Kumar Upadhyay, Sr. DR

Section 132Section 143(1)Section 147Section 148Section 153CSection 68

form of bogus Long-Term Capital Gains (LTCG)/ Short-Term Capital Gains (STCG) of ₹3,64,21,799/- from M/s Alankit Ltd through one entry operator namely Sri Alok Kumar Agarwal. Accordingly, ld AO sought to reopen the assessment for AY 2017-18 by issuance of notice ... assessee having received accommodation entry in the form of bogus LTCG/ STCG of ₹3,64,21,799/- from M/s. Alnakit Ltd through one entry operator, namely Sri Alok Kumar Agarwal, was discussed). The assessee filed his objection vide letter dated 19.01.2022 for the reasons recorded for reopening. The said objection

Enn Vee Holdings Pvt Ltd, New Delhi vs. DCIT Central Circle 31, New Delhi

In the result, the addition made u/s 68 and u/s 56(2)(viib) in the case of M/s Realtime Marketing Pvt

ITA 1195/DEL/2023[2016-17]Status: DisposedITAT Delhi05 Jul 2024AY 2016-17

Bench: Dr. B. R. R. Kumar, Sh. Yogesh Kumar Us

For Appellant: Sh. Neeraj Jain, Adv. &For Respondent: Ms. Sapna Bhatia, CIT-DR

Section 132Section 132(4)Section 143(1)Section 143(2)Section 153ASection 68

erred in holding that Mr. Ashok Jain has admitted in his statement u/s 132(4) that investor companies are being managed by entry operator arranging accommodation entries. 2.3 The CIT-A erred in holding that share certificates of investor companies found from the premises of the NV Group are incriminating ... argued that that Shri Ashok Jain admitted in his sworn statement u/s 132(4) that commission was paid in cash to entry operators and it was part of his unaccounted income, which is an evidence by itself as held by Hon’ble Rajasthan High Court in the case

DCIT, CC-31, New Delhi vs. Enn Vee Holdings Pvt. Ltd., New Delhi

ITA 1841/DEL/2021[2015-16]Status: DisposedITAT Delhi05 Jul 2024AY 2015-16

Bench: Dr. B. R. R. Kumar, Sh. Yogesh Kumar Us

For Appellant: Sh. Neeraj Jain, Adv. &For Respondent: Ms. Sapna Bhatia, CIT-DR

Section 132(4)

erred in ignoring the fact that Shri Ashok Jain admitted in his sworn statement u/s 132(4) that commission was paid in cash to entry operators and it was part of his unaccounted income, which is an evidence as held by Hon’ble Rajasthan High Court in the case ... argued that that Shri Ashok Jain admitted in his sworn statement u/s 132(4) that commission was paid in cash to entry operators and it was part of his unaccounted income, which is an evidence by itself as held by Hon’ble Rajasthan High Court in the case

DCIT, CC-31, New Delhi vs. Enn Vee Holdings Pvt. Ltd., New Delhi

ITA 1840/DEL/2021[2014-15]Status: DisposedITAT Delhi05 Jul 2024AY 2014-15

Bench: Dr. B. R. R. Kumar, Sh. Yogesh Kumar Us

For Appellant: Sh. Neeraj Jain, Adv. &For Respondent: Ms. Sapna Bhatia, CIT-DR

Section 132(4)

DCIT, CC-31, New Delhi vs. Realtime Marketing Pvt. Ltd., Delhi

In the result, the addition made u/s 68 and u/s 56(2)(viib) in the case of M/s Realtime Marketing Pvt

ITA 1839/DEL/2021[2015-16]Status: DisposedITAT Delhi05 Jul 2024AY 2015-16

Bench: Dr. B. R. R. Kumar, Sh. Yogesh Kumar Us

For Appellant: Sh. Neeraj Jain, Adv. &For Respondent: Ms. Sapna Bhatia, CIT-DR

Section 132Section 132(4)Section 143(1)Section 143(2)Section 153ASection 68