“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

Kaushik Pravinchandra Gohel, Bhavnagar vs. The Assessing Officer, Ward-1(2), Bhavnagar

In the result, the appeal of the assessee is allowed with respect to levy of penalty under Section 271(1)(b) of the Act for A

ITA 691/AHD/2023[2015-16]Status: DisposedITAT Ahmedabad17 Apr 2024AY 2015-16

Bench: Smt. Annapurna Gupta& Shri Siddhartha Nautiyal

For Appellant: Shri B. R. Popat, A.RFor Respondent: Shri H. Phani Raju, CIT DR

Section 115BSection 143(2)Section 144Section 147Section 148Section 69Section 69A

rate of 3% on the said amount of Rs.7.37 Crs. to the tune of Rs.22.12 lacs. The assessee has been alleged to be an entry operator providing bills of purchase & sales without any actual business transactions. ITA Nos.690 to 694/Ahd/2023 Kaushik Pravinchandra Gohel vs. Assessing Officer Asst.Years

Kaushik Pravinchandra Gohel, Bhavnagar vs. The Assessing Officer, Ward-1(2), Bhavnagar

In the result, the appeal of the assessee is allowed with respect to levy of penalty under Section 271(1)(b) of the Act for A

ITA 690/AHD/2023[2015-16]Status: DisposedITAT Ahmedabad17 Apr 2024AY 2015-16

Bench: Smt. Annapurna Gupta& Shri Siddhartha Nautiyal

For Appellant: Shri B. R. Popat, A.RFor Respondent: Shri H. Phani Raju, CIT DR

Section 115BSection 143(2)Section 144Section 147Section 148Section 69Section 69A

Jaya Garg, Indore vs. ACIT NFAC, New Delhi

Appeal is allowed for statistical purpose

ITA 418/IND/2023[2014-15]Status: DisposedITAT Indore15 Apr 2024AY 2014-15

Bench: Shri Vijay Pal Rao & Shri B.M. Biyaniassessment Year: 2014-15 Jaya Garg, Acit-Nfac, C-4/5, Shivkripa Colony, New Delhi बनाम/ Sajan Nagar Road, Vs. Indore (Assessee/Appellant) (Revenue/Respondent) Pan: Agtpg 4247 L Assessee By Shri Pankaj Shah Ca, Shri Soumya Bumb Ca, Ms. Ayushi Garg Ca & Ms. Anshika Goyal Ca - Ars Revenue By Shri Ashish Porwal, Sr. Dr Date Of Hearing 09.04.2024 Date Of Pronouncement 5.04.2024

Section 143(2)Section 144BSection 147Section 148Section 149Section 68

AAACZ3842Q which are found to be bogus company whose one of the directors is Shri Sharad Darak, who is an Indore-based accommodation entry operator residing at H.No.9, Bhojnagar, Indore. He has formed several companies in which his family members and self are directors. Shri Sharad Darak is actual ... shows it as liability in its balance sheet. However, in truth, such liability does not exist as equivalent cash is already given to the entry operator. In cases where the entry is of sale/purchase of goods and services, the beneficiaries receive bogus bills/invoices from the entry operator to inflate expenses

V.K.Nanavaty Share and Stock Brokers Private Limited, Mumbai vs. Income Tax Officer Ward-4(2)(4), Mumbai

In the result, the appeal of the assessee is allowed

ITA 2614/MUM/2023[2012-13]Status: DisposedITAT Mumbai12 Apr 2024AY 2012-13

Bench: Shri Aby T. Varkey, Jm & Ms Padmavathy S, Am आयकर अपील सं/ I.T.A. No.2614/Mum/2023 (निर्धारण वर्ा / Assessment Years: 2012-13) V. K. Nanavaty Share & बिधम/ Ito, Ward-4(2)(4) R. No. 647, 6Th Floor, Stock Brokers Pvt. Ltd Vs. R-709, Rotunda Building, Aaykar Bhavan, Bombay Stock Exchange, Maharishi Karve Road, M. S. Marg, Fort, Mumbai- Churchgate, Mumbai- 400023. 400020. स्थधयी लेखध सं./जीआइआर सं./Pan/Gir No. : Aaacv9670N (अपीलार्थी /Appellant) .. (प्रत्यर्थी / Respondent) Assessee By: Shri Ravikant Pathak Revenue By: Dr. Yogendra T. Wakare सुनवाई की तारीख / Date Of Hearing: 20/02/2024 घोषणा की तारीख /Date Of Pronouncement: 12/04/2024 आदेश / O R D E R Per Aby T. Varkey, Jm: This Is An Appeal Preferred By The Assessee Against The Order Of The Ld. Commissioner Of Income Tax (Appeals)/Nfac, Delhi, Dated 30.05.2023 For Ay. 2012-13. 2. The Assessee Has Challenged The Validity Of The Reopening By Ao (Jurisdiction) U/S 147 Of The Income Tax Act, 1961 (Hereinafter “The Act”). So The Legal Issue Is Taken Up First.

For Appellant: Shri Ravikant PathakFor Respondent: Dr. Yogendra T. Wakare

Section 143(3)Section 147Section 148Section 68

Infrastructure Ltd may trigger “Reason to suspect” but there is no whisper in the reasons recorded that assessee had any connection with any entry operators or exit providers or the assessee’s broker was discredited by SEBI or other agencies while trading in this shares. Therefore, the adverse information [report

Tejalben Samirkumar Shah, Ahmedabad vs. The Pr. CIT-1, Ahmedabad

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

ITA 78/AHD/2021[2015-16]Status: DisposedITAT Ahmedabad10 Apr 2024AY 2015-16

Bench: Ms. Suchitra Kamble & Shri Waseem Ahmedआयकरअपीलसं./Ita No. 78/Ahd/2021 धििाधरणवरध/Asstt. Year: 2015-2016 Tejalben Samirkumar Shah, Principal Commissioner Of 10, Opera Society, Vs. Income Tax-1, Vibhag-2, Ahmedabad. Paldi, Ahmedabad-380007. Pan: Askps2898E

For Appellant: Shri Tushar Hemani, Sr. Advocate with Shri Parimalsinh B. Parmar, ARFor Respondent: Shri Karun K Ojha, CIT.DR

Section 10(38)Section 143(3)Section 263

share prices of the scrip M/s Suchak Limited were manipulated artificially by a set of accommodation entry providers controlled by cartel of brokers and entry operators etc. with the sole intention to channelize the unaccounted money of the beneficiaries in their books under the garb of Long Term Capital Gains ... business of bogus LTCG claim. It has revealed that the promoter of "Penny Stock" companies (also known as syndicate member), the share brokers & the entry operator who purchases the shares through paper companies by taking cash. They have also accepted that they receive cash commission from beneficiaries/key operators for being

Arvind Kumar Nehra, Jaipur vs. ITO Ward 7(1), Jaipur

ITA 32/JPR/2024[2017-18]Status: DisposedITAT Jaipur10 Apr 2024AY 2017-18

For Appellant: Shri S.L. Jain,AdvFor Respondent: Shri A.S. Nehra, Addl. CIT-DR

Section 115BSection 143Section 144Section 234A

आयकर अपीलीय अधिकरण, जयपुर न्यायपीठ, जयपुर IN THE INCOME TAX APPELLATE TRIBUNAL, JAIPUR BENCHES,”A” JAIPUR श्री संदीप गोसाई, न्यायिक

Surinder Films(P) Ltd., Kolkata vs. DCIT, Cir-3(1), Kolkata.

In the result, appeal of the assessee is allowed

ITA 1360/KOL/2023[2012-13]Status: DisposedITAT Kolkata09 Apr 2024AY 2012-13

Bench: Dr. Manish Borad, Hon’Ble & Shri Sonjoy Sarma, Hon’Blei.T.A. No. 1360/Kol/2023 Assessment Year: 2012-13 Surinder Films (P) Ltd. Dy. Commissioner Of Income Tax, C/O Subash Agarwal & Associates Vs Circle-3(1), Kolkata Advocates Siddha Gibson 1, Gibson Lane Suite 213, 2Nd Floor Kolkata - 700069 [Pan : Aancs0075K] अपीलाथ"/ (Appellant) "" यथ"/ (Respondent) Assessee By : Shri Siddharth Agarwal, Advocate Revenue By : Shri Arun Kumar Meena, Jcit, Sr. D/R सुनवाई क" तारीख/Date Of Hearing : 08/02/2024 घोषणा क" तारीख /Date Of Pronouncement: 09/04/2024 आदेश/O R D E R Per Dr. Manish Borad: The Present Appeal Is Directed At The Instance Of The Assessee Against The Order Of The National Faceless Appeal Centre, Delhi (Hereinafter The “Ld. Cit(A)”) Dt. 23/11/2023, Passed U/S 250 Of The Income Tax Act, 1961 (“The Act”) For The Assessment Year 2012-13. 2. The Assessee Has Raised The Following Grounds Of Appeal:- 1. (A) For That The Ld. Cit(A) Was Not Justified In Upholding The Validity Of Re-Opening Proceedings U/S 147 Which Was Without Jurisdiction & As Such, Not Sustainable In The Eyes Of Law. (B) For That The Purported Approval Granted By The Principal Cit - 1, Kolkata U/S 151, If Any, Does Not Fulfill The Requirements Of Law Thereby Vitiating The Entire Proceedings. 2. For That The Ld. Cit(A) Was Not Justified In Confirming The Addition Made By The A.O. Of Rs. 30,00,000/- On Account Of Unsecured Loan Received From Mirabelle Tradecom Pvt Ltd. U/S 68. 2

For Appellant: Shri Siddharth Agarwal, AdvocateFor Respondent: Shri Arun Kumar Meena, JCIT, Sr. D/R

Section 143(1)Section 143(3)Section 147Section 148Section 151Section 250Section 68Section 69C

banking transactions in the accounts of the three concerns and money trail has been prepared. The account are controlled and managed by host of entry operators whose names figure in the data base maintained with this directorate. In the statement recorded the dummy director has agreed to the finding that ... transactions carried out in the bank account of this company. Reference is also made that the accounts are controlled and managed by host of entry operators whose names figure in the database maintained. Further reference has been made to two more companies, 6 I.T.A. No. 1360/Kol/2023 Assessment Year

Shri Dinesh Agarwal, Kolkata vs. A.C.I.T., Central Circle-3(4), Kolkata

In the result, all the seven appeals of the assessee are allowed for statistical purposes

ITA 2624/KOL/2019[2015-16]Status: DisposedITAT Kolkata09 Apr 2024AY 2015-16

Bench: Shri Sanjay Garg & Shri Girish Agrawalassessment Year: 2015-16 Amit Agarwal, Assistant Commissioner Of 49A, Tollygunge Circular Road, Vs. Income Tax, Central Circle- New Alipore, Kolkata-700053. 3(4), Kolkata. (Pan: Agapa0320R) (Appellant) (Respondent)

For Appellant: Shri Miraj D. Shah & Shri S. M. Surana, AdvocateFor Respondent: Shri P. P. Barnab, Addl. CIT, Sr. DR

Section 132Section 133ASection 143(3)

Directorate of Income Tax (Inv.), Kolkata in certain cases. He noted that such operation resulted in unearthing of a large syndicate of entry operators, share brokers and money launderers etc. involved in providing bogus accommodation entries on account of exempt income, short term capital loss, business loss etc. AO doubted ... unexplained expenditure u/s. 69C by adopting an ad hoc rate of 5% on the amount of Rs.87,36,730/- towards commission charged by the entry operator for providing and facilitating accommodation entry. Aggrieved, assessee went in appeal before the Ld. CIT(A) who 2624/Kol/2019, AYs 2015-16 dismissed the same

Shri Vijay Agarwal, Kolkata vs. A.C.I.T., Central Circle-3(4), Kolkata

In the result, all the seven appeals of the assessee are allowed for statistical purposes

ITA 2623/KOL/2019[2015-16]Status: DisposedITAT Kolkata09 Apr 2024AY 2015-16

For Appellant: Shri Miraj D. Shah & Shri S. M. Surana, AdvocateFor Respondent: Shri P. P. Barnab, Addl. CIT, Sr. DR

Section 132Section 133ASection 143(3)

Shri Amit Agarwal, Kolkata vs. A.C.I.T., CC-3(4), Kolkata

In the result, all the seven appeals of the assessee are allowed for statistical purposes

ITA 2592/KOL/2019[2015-16]Status: DisposedITAT Kolkata09 Apr 2024AY 2015-16

For Appellant: Shri Miraj D. Shah & Shri S. M. Surana, AdvocateFor Respondent: Shri P. P. Barnab, Addl. CIT, Sr. DR

Section 132Section 133ASection 143(3)

Shri Shrey Agarwal, Kolkata vs. A.C.I.T., Circle-3(40, Kolkata

In the result, all the seven appeals of the assessee are allowed for statistical purposes

ITA 2565/KOL/2019[2015-16]Status: DisposedITAT Kolkata09 Apr 2024AY 2015-16

For Appellant: Shri Miraj D. Shah & Shri S. M. Surana, AdvocateFor Respondent: Shri P. P. Barnab, Addl. CIT, Sr. DR

Section 132Section 133ASection 143(3)

Shri Mahesh Agarwal, Kolkata vs. A.C.I.T., Central Circle-3(4), Kolkata

In the result, all the seven appeals of the assessee are allowed for statistical purposes

ITA 2539/KOL/2019[2015-16]Status: DisposedITAT Kolkata09 Apr 2024AY 2015-16

For Appellant: Shri Miraj D. Shah & Shri S. M. Surana, AdvocateFor Respondent: Shri P. P. Barnab, Addl. CIT, Sr. DR

Section 132Section 133ASection 143(3)

Shri Kishore Kumar Agarwal, Kolkata vs. A.C.I.T., Circle-3(4), Kolkata

In the result, all the seven appeals of the assessee are allowed for statistical purposes

ITA 2530/KOL/2019[2015-16]Status: DisposedITAT Kolkata09 Apr 2024AY 2015-16

For Appellant: Shri Miraj D. Shah & Shri S. M. Surana, AdvocateFor Respondent: Shri P. P. Barnab, Addl. CIT, Sr. DR

Section 132Section 133ASection 143(3)

Shri Kamal Agarwal, Kolkata vs. A.C.I.T., Central Circle-3(4), Kolkata

In the result, all the seven appeals of the assessee are allowed for statistical purposes

ITA 2522/KOL/2019[2015-16]Status: DisposedITAT Kolkata09 Apr 2024AY 2015-16

For Appellant: Shri Miraj D. Shah & Shri S. M. Surana, AdvocateFor Respondent: Shri P. P. Barnab, Addl. CIT, Sr. DR

Section 132Section 133ASection 143(3)

M/S City Shoppe Estates Limited, Kolkata vs. DCIT, Cir. 4(3), Kolkata

In the result, appeal of the assessee is allowed

ITA 42/KOL/2024[2010-11]Status: DisposedITAT Kolkata08 Apr 2024AY 2010-11

Bench: Shri Sanjay Garg & Shri Girish Agrawalassessment Year: 2010-11

For Appellant: Shri A. K. Tulsiyan, FCAFor Respondent: Shri Umakanta Dhrupati, Addl. CIT, DR

Section 132Section 133(6)Section 147Section 148Section 234BSection 250Section 68

introduce back the unaccounted income generated by it in the guise of share capital and share premium and unsecured loans through host of entry operators. It was further noted that in the year under consideration, assessee had taken benefit of Rs.40,00,000/- from such cash deposit through shell/jamakharchi companies ... managed and controlled by different entry operators. It was also referred to statement of one Shri Subhas Agarwal recorded u/s. 132 of the Act during the course of search and seizure operation on whose deposition, ld. AO formed the reason to believe that assessee’s income 3 City Shoppe Estates

Spectrum Foods Limited, Jaipur vs. Income Tax Officer, Jaipur

In the result, the appeal of the assessee is allowed

ITA 38/JPR/2024[2010-11]Status: DisposedITAT Jaipur08 Apr 2024AY 2010-11

Bench: DR. S. SEETHALAKSHMI (Judicial Member)

For Appellant: Sh. S. L. Poddar, AdvFor Respondent: Sh. Anup Singh (Addl. CIT)

Section 143(3)Section 147Section 148

information received from Investigation wing that assessee GUJARAT Jayant Security & had received certain amount as a loan from a company, Finance Ltd.v.Assistant working as entry operator and earning bogus funds to Commissioner of Income-tax, provide advances to various person, was justified. officer Circle 1(1) 13. [2012] 18 taxmann.com ... reasons that GUJARAT Peass Industrial information was received from Competent Authority, Engineers (P.) Ltd. v. Deputy Kolkata that one 'K' was very known entry operator and Commissioner of Income-tax instant assessee was also a beneficiary of 'K' to extent of Rs. 183 lakhs pertaining to assessment year

Sheela Ashok Bafna, Mumbai vs. ITO, Ward-20(3(3), Mumbai

In the result, the appeal of the assessee is allowed

ITA 2/MUM/2023[2015-16]Status: DisposedITAT Mumbai08 Apr 2024AY 2015-16

For Appellant: Shri Rajiv KhandelwalFor Respondent: Shri Nayanjyoti Nath (DR)

Section 133(6)Section 68

verified the cash trail (no details of cash-trail regarding assessee's case given); and then he discussed the general modus-operandi adopted by entry operators through their jamakharchi/paper companies who took money/cash, and arranged purchase of shares of penny stock and facilitated in selling them, through paper companies which ... assessee and purchased the shares by giving cheque, on which assessee shows earning of LTCG which are nothing but bogus. And that, statements of entry operators who controlled and managed these entry providers revealed that these entities (exit providers) are bogus/paper entities, which are not doing any real business

Amit Katyal, New Delhi vs. DCIT, Central Circle- 1, Gurgaon

In the result, the appeal of the assessee is allowed

ITA 3911/DEL/2019[2012-13]Status: DisposedITAT Delhi08 Apr 2024AY 2012-13

Bench: Shri C. N. Prasad & Shri M. Balaganeshamit Katyal, Vs. Dcit, C-654, New Friends Central Circle-1, Colony, New Delhi Gurgaon (Appellant) (Respondent) Pan:Aaepk4669H Assessee By : Shri V. K. Bindal, Ca Ms. Rinki Sharma, Itp Revenue By: Shri Safarul Haque Tanweer, Cit Dr Date Of Hearing 10/01/2024 Date Of Pronouncement 08/04/2024

For Appellant: Shri V. K. Bindal, CAFor Respondent: Shri Safarul Haque Tanweer, CIT DR

Section 132Section 139(1)Section 143(2)Section 143(3)Section 153(1)(b)Section 153ASection 153C

case of the assessee got centralised only on 5.9.2016, which means the AO could have received any information relating to bogus LTCG based on entry operators statements only on or after 5.9.2016 and certainly not before that date. This is so because absolutely no documents of incriminating nature was found

Dy. Commissioner of Income Tax, Central Circle-3(3), Mumbai vs. Avaada Ventures Private Limited, Mumbai

In the result, all the appeals of the Revenue are dismissed as well as Cross Objections of the assessee are dismissed as infructuous

ITA 4342/MUM/2023[2017]Status: DisposedITAT Mumbai05 Apr 2024

Bench: SHRI AMIT SHUKLA (Judicial Member), SHRI S RIFAUR RAHMAN (Accountant Member)

Section 132Section 132(4)Section 139(1)Section 143(3)Section 153A

carried out by these companies. The ld. AO has also analysed the bank statement of shareholders and investors and their purported links to hawala entry operators. The entire content of the remand report has been incorporated in the appellate order from pages 78-85 alongwith remand report dated 26/07/2022 containing ... same cannot be considered as incriminating material for the assessee 9.20 Further, in the assessment order, AO has relied upon the statement of certain entry operators recorded u/s 131 by the Kolkata investigation wing in the post search proceedings whose statement were earlier recorded by investigation wing in year

Deputy Commissioner of Income Tax, Mumbai vs. Avaada Ventures Pvt. Ltd, Andheri

In the result, all the appeals of the Revenue are

ITA 3613/MUM/2023[2016-17]Status: DisposedITAT Mumbai05 Apr 2024AY 2016-17

Section 132Section 132(4)Section 139(1)Section 143(3)Section 153A

carried out by these companies. The Id. AO has also analysed the bank statement of shareholders and investors and their purported links to hawala entry operators. The entire content of the remand report has been incorporated in the appellate order from pages 78-85 alongwith remand report dated 26/07/2022 containing ... same cannot be considered as incriminating material for the assessee 9.20 Further, in the assessment order, AO has relied upon the statement of certain entry operators recorded u/s 131 by the Kolkata investigation wing in the post search proceedings whose statement were earlier recorded by investigation wing in year