“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

Vinisha Jitendra Adnani, Mumbai vs. ITO Ward 23(3), Mumbai

In the result, based on the above factual observations, proceedings carried out by the AO and further confirmed by the Ld

ITA 2875/MUM/2023[2014-15]Status: DisposedITAT Mumbai14 May 2024AY 2014-15

Bench: Shripavan Kumar Gadale & Shri Gagan Goyalvinisha Jitendra Adnani, 101/104, 1St Floor, Spenta, 3 Road, Khar West, Mumbai-400 052 Pan:Adhpa0316M ...... Appellant Vs. Nfac/Ito Ward 23(3)(6), Earnest House, Mumbai. ..... Respondent

For Appellant: Shri Snehal Shah, Ld. ARFor Respondent: Ms. Rajeshwari Menon,Ld.DR

Section 10(38)Section 148Section 250oSection 68

Director of Income Tax (Inv.), Kolkata that the scrip namely Luminai Tech is penny stock scrip and in connivance with the promoters, brokers, entry operators and exit providers accommodation entry has been provided to various beneficiaries as Long-Term Capital Gain/ Short Term Capital Loss. Based on this information case

Winsher Commercial Pvt. Ltd., Kolkata vs. I.T.O., Ward - 14(2), Presently D.C.I.T., Circle-11(1), Kolkatakolkata, Kolkata

Appeal of the assessee is allowed for statistical purposes

ITA 668/KOL/2022[2014-2015]Status: DisposedITAT Kolkata13 May 2024AY 2014-2015

Bench: Shri Rajpal Yadav, Vice-(Kz) & Shri Rajesh Kumari.T.A. No. 668/Kol/2022 Assessment Year: 2014-2015 Winsher Commercial Pvt. Limited,…....….Appellant C/O. Subash Agarwal & Associates, Advocates, Siddha Gibson, 1, Gibson Lane, Suite 213, 2Nd Floor, Kolkata-700069 [Pan:Aaacw3125H] -Vs.- Income Tax Officer,………………………………Respondent Ward-14(2), Kolkata, [Presently Dcit, Circle-11(1), Kolkata], Aayakar Bhawan, P-7, Chowringhee Square, Kolkata-700069 Appearances By: Shri Siddharth Agarwal, Advocate, Appeared On Behalf Of The Assessee Shri B.K. Singh, Jcit, Sr. D.R., Appeared On Behalf Of The Revenue Date Of Concluding The Hearing : March 21, 2024 Date Of Pronouncing The Order : May 13, 2024 O R D E R

Section 10(38)Section 68

Assessing Officer has observed that the Director of Income Tax (Investigation), Kolkata carried out search and seizure operations to various brokers and entry operators. It recorded their statements and one of the persons is Shri Pankaj Agarwal, who has deposed on oath. The ld. DIT(Investigation) has transmitted the material ... capital gain and claimed exemption under section 10(38) of the Income Tax Act. Such gains 2 Winsher Commercial Pvt. Limited were manipulated by entry operators. Copy of the show-cause notice has been reproduced by the ld. Assessing Officer on page no. 1 of the assessment order

ITO-19(2)(2), Mumbai, Lalbaug vs. Kanubhai Purshotam Raval, Tardeo

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

ITA 3053/MUM/2023[2010-11]Status: DisposedITAT Mumbai10 May 2024AY 2010-11

Bench: Kavitha Rajagopal, Jm & Shri Omkareshwar Chidara, Am

For Appellant: NoneFor Respondent: Shri Biswanath Das-CIT DR/

Section 132Section 142(1)Section 143(1)Section 144Section 147Section 148Section 250

appeal before the ld. CIT(A) who vide order dated 01.07.2023 deleted the impugned addition for the reason that the assessee was only an entry operator earning commission on such bogus transaction and not the beneficiary. The ld. CIT(A) restricted the addition to 2% on the amount of debit

ITO-19(2)(2), Mumbai, Lalbaug vs. Kanubhai Purshotam Raval, Tardeo

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

ITA 3052/MUM/2023[2012-13]Status: DisposedITAT Mumbai10 May 2024AY 2012-13

Bench: Kavitha Rajagopal, Jm & Shri Omkareshwar Chidara, Am

For Appellant: NoneFor Respondent: Shri Biswanath Das-CIT DR/

Section 132Section 142(1)Section 143(1)Section 144Section 147Section 148Section 250

Sachin Kanodia, New Delhi vs. ITO Ward - 42(2), New Delhi

Appeal are dismissed

ITA 9504/DEL/2019[2015-16]Status: DisposedITAT Delhi10 May 2024AY 2015-16

Bench: SHRI S. RIFAUR RAHMAN (Accountant Member), SHRI YOGESH KUMAR U.S. (Judicial Member)

Section 142(2)Section 143(2)Section 2Section 68Section 69C

normal course. The investigation conducted by the Department has also 9 Sachin Kanodia Vs. ITO identified this company which has been used by the entry operators to provide accommodation entries to various persons by artificially inflating the share price of the company. The AO has also applied the test ... record by the Assessing Officer, because of the manipulations in the price of shares in a pre-planned manner by the interested broker and entry operators. The insistence of the assessee that the transactions leading to long-term capital gains are supported by documents such as sale and purchase invoices

Ramotar Choudhari HUF, Kolkata vs. PCIT 5 Kolkata, Kolkata

In the result, the appeal of the assessee stands allowed

ITA 1336/KOL/2023[2013-14]Status: DisposedITAT Kolkata09 May 2024AY 2013-14

Bench: Shri Sanjay Garg & Shri Sanjay Awasthii.T.A. No.1336/Kol/2023 Assessment Year : 2013-14 Ramotar Choudhari Huf.……..…………............…...……………....Appellant 7Th Floor, R.N 25 Fortuna Tower, 23A N.S. Road, Kolkata-1. [Pan: Aanhr9093K] Vs. Pcit-5, Kolkata………….…...............................................…..…..... Respondent Appearances By: Shri S. K. Pransukha, Fca, Appeared On Behalf Of The Appellant. Shri Abhijit Kundu, Cit-Dr, Appeared On Behalf Of The Respondent. Date Of Concluding The Hearing : May 06, 2024 Date Of Pronouncing The Order : May 09, 2024 आदेश / Order संजय गग", "या"यक सद"य "वारा / Per Sanjay Garg: The Present Appeal Has Been Preferred By The Assessee Against The Revision Order Dated 18.10.2023 Of The Principal Commissioner Of Income Tax, Kolkata [Hereinafter Referred To As ‘Pr. Cit’] Passed U/S 263 Of The Income Tax Act (Hereinafter Referred To As The ‘Act’). The Assessee In This Appeal Has Agitated Against The Action Of The Pr. Cit In Exercising His Revision Jurisdiction U/S 263 Of The Act & Thereby Directing The Assessing Officer To Frame The Assessment Afresh. 2. The Brief Facts Of The Case Are That The Assessee Filed Return Of Income For The Year Under Consideration Declaring Total Income Of Rs.2,55,970/- On 21.01.2014. Thereafter, An Information Was Received By The Assessing Officer From Investigation Wing That The Assessee Has

Section 10(38)Section 142(1)Section 147Section 263

observing that from the record and reply of the assessee, it was found that the evidences gathered against the assessee including the statement of entry operators and other relevant materials to prove M/s Blueprint Securities Ltd. was penny stock company, were not properly confronted by the Assessing Officer ... information cannot be relied upon. As per assessee, nothing has been brought by the A.O. to show any nexus between the assessee and the entry operator. The assessee has placed reliance on the decision of Supreme Court in case of Malabar Industrial Co. Ltd. and decision of Gujarat High Court

Namokar Builders Pvt. Ltd., Kolkata vs. D.C.I.T., Central Circle -2(1), Kolkata

In the result, the appeal of the assessee is allowed

ITA 762/KOL/2022[2013-2014]Status: DisposedITAT Kolkata09 May 2024AY 2013-2014

Bench: Shri Rajpal Yadav & Shri Rajesh Kumar, Am]

Section 131Section 133ASection 143(1)Section 143(3)

details of payment. Thereafter, the AO by referring to and discussing the large scale manipulations on the stock market platform done by some unscrupulous entry operators to provide some pre-arranged long term capital gain and short term capital loss/trading loss by price rigging in some shares in a syndicate ... 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

Grand Consulting Services Private Limited, Indore vs. Income Tax Officer -2 (1), Indore

In the result, appeal of the assessee is dismissed

ITA 514/IND/2023[2012-2013]Status: HeardITAT Indore09 May 2024AY 2012-2013

Bench: Shri Vijay Pal Rao & Shri B.M. Biyanigrand Consulting Servides Pvt. Ito, 2(1) Ltd. Indore 403 C 4Th Floor Gravity Mall 27 Vs. Mechanic Nagar Bhamori (Appellant / Assessee) (Respondent/ Revenue) Pan: Aadcg4729N Assessee By Shri Manish Dafria, Ar Revenue By Shri Ashish Porwal, Sr. Dr Date Of Hearing 06.05.2024 Date Of Pronouncement 09.05.2024

Section 132Section 132(4)Section 140Section 142(1)Section 144Section 147Section 148Section 253Section 253(1)

search and seizure action statement of Shri Vipul Vidur Batt was recorded u/s 132(4) in which he accepted that he is an entry operator and all 11 companies were bogus entries of the companies used for providing various bogus entities /entries to the beneficiaries for commission. Based

ITO Ward -19(4), New Delhi vs. Pioneer Factors It Infra Developers Pvt Ltd, New Delhi

In the result appeal is dismissed

ITA 1913/DEL/2019[2015-16]Status: DisposedITAT Delhi06 May 2024AY 2015-16

Bench: Shri S Rifaur Rahman & Shri Vimal Kumarasstt. Year: 2015-16 Ito, Ward-19(4) Vs. M/S. Pioneer Factor Room No. 209, Developers Pvt. Ltd. C.R. Building, 5Th Floor, Padma Palace, New Delhi. 86, Nehru Place, New Delhi – 110 019 Pan Aaecp3203B (Appellant) (Respondent)

For Appellant: Shri Gautam Jain, AdvocateFor Respondent: Ms. Mayuri, Sr. DR

Section 133(6)Section 143(3)Section 68

above factual position was corroborated by bank statement investors. None of the four investor entities were having any blemished track record of entry operators. All four were regular income tax assessees filing ITRs. The four investors had provided statutory records like audited financial statements, ITR, Confirmation, Bank Statements, Share Certificates

ACIT Circle 46(1), Civic Centre, New Delhi vs. Yogesh Gambhir, Delhi

In the result, appeal of the Revenue is dismissed

ITA 3018/DEL/2023[2017-18]Status: DisposedITAT Delhi01 May 2024AY 2017-18

Bench: the Id. CIT(A)

Section 147Section 148Section 149Section 151Section 153Section 153ASection 153CSection 68

assessee has received accommodation entry in the form of bogus LTCG/STCG of Rs. 4,03,21,009/- from M/s. Alankit Ltd. through one entry operator namely Shri Alok Kumar Agarwal. Therefore, AO held that an amount of Rs. 4,03,21,009/- is added back to the total income

Mr. Zamirullah Subedarkhan Khan, Mumbai vs. ITO-Ward 20(3)(5), Mumbai

In the result, the appeal is partly allowed

ITA 4165/MUM/2023[2011-12]Status: DisposedITAT Mumbai30 Apr 2024AY 2011-12

Bench: Shri Narender Kumar Choudhry & Shri Ratnesh Nandan Sahayassessment Year: 2011-12 Mr. Zamirullah Ito- Ward 20(3)(5), Subedarkhan Khan Room No. 205, B.P.T., Piramal Chamber, Plot No. 262, Lalbaug, Vs. Kolsa Bunder, Mumbai- 400012 Darukhana, Reay Road, Mumbai- 400010. Pan: Aabpk9505H (Appellant) (Respondent) Present For: Assessee By : None Revenue By : Shri Manoj Kumar Singh, Sr. A.R. Date Of Hearing : 25 .04 . 2024 Date Of Pronouncement : 30 .04 . 2024 O R D E R Per: Ratnesh Nandan Sahay: 1. This Appeal Has Been Filed By The Appellant Against The Order Of The Ld. Cit Appeal Passed U/S 250 Of The Income Tax Act, 1961 [The ‘Act’ In Short] Vide Order No. Itba/Nfac/S/250/2023-24/1056652408(1) Dated 29/9/2023 For The Assessment Year 2011-12. 2. The Facts Of The Case, In Brief, Are That The Assessee Had Filed Its Return Of Income Declaring The Total Income At Rs.14,08,440/- Which Was Processed

For Appellant: NoneFor Respondent: Shri Manoj Kumar Singh, Sr. A.R

Section 133(6)Section 143(1)Section 147Section 250Section 69C

received from the office of DGIT (Inv.) Mumbai that the assessee was engaged in bogus purchase activities and had taken accommodation entries from the entry operators. During the assessment year under consideration the assessee had taken bogus purchases bills from one M/s. Mumbai Trading Company amounting to Rs.52

Sama Jewellery Private Limited, Mumbai vs. DCIT-8(1)(1), Mumbai

In the result, the appeal is partly allowed

ITA 3988/MUM/2023[2011-12]Status: DisposedITAT Mumbai30 Apr 2024AY 2011-12

Bench: Shri Narender Kumar Choudhry & Shri Ratnesh Nandan Sahaysama Jewellery Private Dcit-8(1)(1) 6Th Floor, Limited, 313, Vasan Udyog Bhavan, Aayakar Bhawan, Off Senapati Bapat Marg, M.K. Road, Vs. Lower Parel, Mumbai 400020 Mumbai 400013. Pan No. Aaaat3419K (Appellant) (Respondent) Assessee By : Shri Himanshu Gandhi – Ca : Shri Prashant Mahajan – Sr. Ar Revenue By Date Of Hearing: 16.04.2024 Date Of Pronouncement : 30.04.2024 O R D E R Per: Ratnesh Nandan Sahay: 1. This Appeal Has Been Filed Against The Order Of The Ld. Cit Appeal Passed U/S 250 Of The Income Tax Act [The ‘Act’ In Short] Vide Din & Order No. Itba/ Nfac/S/250/2023-24/1056140099(1) Dated 15.9.2023 For The Assessment Year 2011-12. 2. The Facts Of The Case, In Brief, Are That The Appellant Is A Private Limited Company Engaged In The Business Of Manufacturing & Trading Of Jewelry. For The Assessment Year Under Consideration, The Appellant Filed Its Return Of Income Electronically On 28.09.2011 Declaring Total Income Of Rs.1,35,53,039/- Which Was Processed U/S. 143(1) Of The Income Tax Act Accepting The Returned Income. 3. In The Meantime, A Survey U/S. 133A Was Conducted In The Business Premises Of The Appellant On 04.2.2011 & Certain Discrepancy Was Sama Jewellery Private Limited; A. Y.2011-12

For Appellant: Shri Himanshu Gandhi – CA

Section 131Section 133(6)Section 133ASection 143(1)Section 143(3)Section 147Section 148Section 250

Income Tax Act, 1961 on the ground that the assessee had received accommodation entries from one Mr. Rajendra Jain, an entry operator to the tune of Rs. 42,67,255/- in the Financial Year 2010-11. 5. The AO, in order to verify the genuineness of the transactions issued notice

Sajjan Kedia HUF, Mumbai vs. Income Tax Officer Ward 30(3)(4), Mumbai

In the result, appeal is dismissed

ITA 2662/MUM/2023[2012-13]Status: DisposedITAT Mumbai30 Apr 2024AY 2012-13

Bench: Shri Narender Kumar Choudhry & Shri Ratnesh Nandan Sahaymr. Sajjan Kedia Huf The Income Tax Officer, 1004,K. Palam Court, Ward 30 (3) (4), Malad Link Road, Room No.604, Malad West, C- 13, Pratyashkar Vs. Mumbai- 400064 Bhavan, Pan No. Aamhs9553G Bandra Kurla Complex, Mumbai- 400 051. (Appellant) (Respondent)

For Appellant: NoneFor Respondent: Shri. Prashant Mahajan - Sr. A.R

Section 10(38)Section 143(1)Section 147Section 148Section 250Section 68Section 69C

Subsequently, information was received from the Investigation Wing of the Income Tax Department that the assessee has taken bogus entries from the entry operators without entering into actual transactions and the claim of the Long-Term Capital Mr. Sajjan Kedia HUF Gains is bogus. Accordingly, the case was reopened