“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

M/S. B.L. Tak and Sons (HUF), Kolkata vs. ITO, Ward - 34(1), Kolkata

In the result, the appeal filed by the assessee in ITA No

ITA 2622/KOL/2018[2014-15]Status: DisposedITAT Kolkata14 Mar 2024AY 2014-15

Bench: Shri Manish Borad&Shri Anikesh Banerjee]

Section 143(3)Section 250Section 68Section 69C

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 ... merely based on a theory called preponderance of probability that in same type of cases prices are rigged up and down by the entry operators in order to provide accommodation entry to various persons in the form of Long term capital gain and 8 I.T.A. No.2622/Kol/2018 Assessment Years

M/S. Indovision Securities Limited., Kolkata vs. ITO, Ward-6(2), Kolkata.

In the result, the appeal of the assessee stands allowed

ITA 1353/KOL/2023[2012-13]Status: DisposedITAT Kolkata11 Mar 2024AY 2012-13

Bench: Shri Sanjay Garg & Shri Girish Agrawali.T.A. No.1353/Kol/2023 Assessment Year : 2012-13 M/S Indovision Securities Ltd….…………............…...……………....Appellant Block B, Suit No.1A, 1St Floor Mangalam, 24 & 26 Hemanta Basu Sarani, Isi P.O S.O, Kolkata-1. [Pan: Aaaci5310G] Vs. Ito, Ward-6(2), Kolkata….….............................................…..…..... Respondent Appearances By: Shri Sunil Surana, Ar, Appeared On Behalf Of The Appellant. Shri Abhijit Kundu, Cit-Dr, Appeared On Behalf Of The Respondent. Date Of Concluding The Hearing : February 27, 2024 Date Of Pronouncing The Order : March 11, 2024 आदेश / Order संजय गग", "या"यक सद"य "वारा / Per Sanjay Garg: The Present Appeal Has Been Preferred By The Assessee Against The Order Dated 30.03.2023 Of The National Faceless Appeal Centre [Hereinafter Referred To As ‘Cit(A)’] Passed U/S 250 Of The Income Tax Act (Hereinafter Referred To As The ‘Act’). 2. The Appeal Is Time-Barred By 196 Days. A Separate Application For Condonation Of Delay Has Been Filed. Considering The Averments Made In The Application, The Delay In Filing The Present Appeal Is Hereby Condoned. 3. The Assessee In This Appeal Has Taken The Following Grounds Of Appeal: “1. For That The Ld Cit(A) Erred In Deciding The Appeal Ex-Parte When No Proper & Reasonable Opportunity Of Being Heard Was Granted.

Section 143(1)Section 143(3)Section 147Section 148Section 250

assessment order has alleged that the assessee had received accommodation entries of Rs.4,70,50,000/-, which was allegedly provided by a well-known entry operator namely Devesh Upadhyay through his managed account M/s Chitraksh Vintrade Pvt. Ltd. after layering of the accounts. The ld. counsel has submitted that

Prahlad Dutt Lata, Kolkata vs. ITO, Ward-35(1), Kolkata

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

ITA 265/KOL/2019[2014-15]Status: DisposedITAT Kolkata05 Mar 2024AY 2014-15

Bench: Shri Sanjay Garg, Hon’Ble & Dr. Manish Borad, Hon’Blei.T.A. No. 265/Kol/2019 Assessment Year: 2014-15 Prahlad Dutt Lata Income Tax Officer, Ward – Vs 35(1), Kolkata Urvashi Apartment 3, Hunger Ford Street Kolkata - 700017 [Pan : Aaxpl1559J] अपीलाथ"/ (Appellant) "" यथ"/ (Respondent) Assessee By : None Revenue By : Shri Raja Sengupta, Addl. Cit, Sr. D/R सुनवाई क" तारीख/Date Of Hearing : 22/02/2024 घोषणा क" तारीख /Date Of Pronouncement: 05/03/2024 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 Learned Commissioner Of Income Tax (Appeals) – 2, Kolkata (Hereinafter The “Ld. Cit(A)”) Dt. 13/08/2018, Passed U/S 250 Of The Income Tax Act, 1961 (“The Act”) For The Assessment Year 2014-15. 2. The Registry Has Pointed Out That There Is A Delay Of 86 Days In Filing Of This Appeal. There Is A Petition For Condonation Of Delay Along With An Affidavit & The Reason For The Said Delay Is Mainly On Account Of Old Age Of The Assessee & The Delay On The Part Of The Person Who Received The Envelope Sent From The Office Of The Ld. Cit(A) Which Was Required To Be Handed Over To The Assessee. On Perusal Of The Affidavit, We Are Convinced That The Assessee Was Prevented For Reasonable Cause

For Appellant: NoneFor Respondent: Shri Raja Sengupta, Addl. CIT, Sr. D/R

Section 10(1)Section 143(2)Section 144Section 154Section 234BSection 250

Shaleen Textiles Limited, which is part of the 84 companies detected by the SEBI were found to be part of a racket of the entry operators providing accommodation entries. The ld. CIT(A) based on the settled judicial precedents and also based on the various decisions as referred

Jajodia Finance Ltd., Kolkata vs. ITO, Ward-9(3), Kolkata.

In the result the appeal of the assessee is allowed

ITA 614/KOL/2023[2014-15]Status: DisposedITAT Kolkata29 Feb 2024AY 2014-15

Bench: Shri Rajesh Kumar & Shri Sonjoy Sarma

Section 143(1)Section 143(3)

market. Besides ld. Assessing Officer noted that information was received from Directorate of Investigation, New Delhi that M/s. Jajodia Finance Limited is an entry operator and involved in giving bogus entries for purchase and sale of investments, share application etc. on commission basis. Finally ld. Assessing Officer after giving show ... this case, the ld. Assessing Officer has received information from Directorate of Investigation, New Delhi that the assessee 3 Jajodia Finance Limited is an entry operator engaged in the business of providing accommodation entries by trading in purchase and sale of shares and advancing unsecured loans. The ld. Assessing Officer

Sulochana Sarees Pvt. Ltd., Kolkata vs. PCIT-1, Kolkata

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

ITA 187/KOL/2021[2011-12]Status: DisposedITAT Kolkata29 Feb 2024AY 2011-12

Bench: Sri Rajesh Kumar & Sonjoy Sarma

Section 144Section 147Section 263

levels, right from origin of the funds to the final destination stands substantiated and neither there is unaccounted money nor there is any outside entry operator to route the unaccounted funds for making such investments. Although looking to the peculiarity of the facts and circumstances of the case where these

Truevalue Projects Private Limited, Mumbai vs. Deputy Commissioner of Income Tax-Circle 1(3)(2), Mumbai

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

ITA 3756/MUM/2023[2012-13]Status: DisposedITAT Mumbai29 Feb 2024AY 2012-13

Bench: Shri Prashant Maharishi, Am & Shri Rahul Chaudhary, Jm Dy. Cit Truevalue Projects Private Circle 1(3)(2) Limited Aaykar Bhavan Office No.Ii-B, Mezzanine Floor, Vs. 289 Emca House, S.B.S Road, Maharshi Karve Road, Fort, Mumbai-400 001 Mumbai-400 020 (Appellant) (Respondent) Pan No. Aacct5333Q Assessee By : Ms. Rekha Pandey, Ar Revenue By : Shri P.D. Chougule, Dr Date Of Hearing: 29.02.2024 Date Of Pronouncement : 29.02.2024

For Appellant: Ms. Rekha Pandey, ARFor Respondent: Shri P.D. Chougule, DR

Section 132Section 133(6)Section 143(3)Section 147Section 148Section 68

Section 132 of the Income-tax Act, 1961 (the Act) on Shri Pravil Agarwal and his group companies on 13th September, 2012, being an entry operator. In his statement, he has accepted on oath that he has registered number of paper companies with bogus share capital etc. and has given

Nirwan Monetary Services Pvt Ltd., Mumbai vs. ITO Ward-4(2)(1), Mumbai

ITA 3745/MUM/2023[2013-14]Status: DisposedITAT Mumbai29 Feb 2024AY 2013-14

Bench: Shri Kuldip Singh & Shri Amarjit Singh

For Appellant: Shri Aditya Maheshwari, A.RFor Respondent: Shri S. Arunkumar, D.R

Section 143(3)

Bhatt and his other related entities on 05.02.2016. During the search M/s. Vipul Vidhur Bhatt has got recorded the statement that he is an entry operator and provided various accommodation entries to the numerous beneficiaries and one such accommodation entry was given to the assessee company of Rs.5

Nirwan Monetary Services Pvt Ltd., Mumbai vs. ITO Ward-4(2)(1), Mumbai

ITA 3744/MUM/2023[2011-12]Status: DisposedITAT Mumbai29 Feb 2024AY 2011-12

Bench: Shri Kuldip Singh & Shri Amarjit Singh

For Appellant: Shri Aditya Maheshwari, A.RFor Respondent: Shri S. Arunkumar, D.R

Section 143(3)

Income Tax Officer-27(1)(1), Mumbai vs. Bharat Chandrakant Jasani, Mumbai

In the result, appeal filed by the revenue is dismissed

ITA 2648/MUM/2023[2011-12]Status: DisposedITAT Mumbai29 Feb 2024AY 2011-12

Bench: Shri Aby T Varkey, Hon'Ble & Shri S. Rifaur Rahman, Hon'Bleincome Tax Officer-27(1)(1) V. Bharat Chandrakant Jasan R.No. 406, 4Th Floor, Tower No. 6 A 402, Sai Darshan, Garden Lane Vashi Railway Station Complex Sanghani Estate, Ghatkopar (E) Vashi, Navi Mumbai - 400703 Mumbai - 400086 Pan: Afcpj7029K (Appellant) (Respondent) Assessee Represented By : Shri Shashank Mehta Department Represented By Shri Ashok Kumar Ambastha

Section 133(6)Section 143(1)Section 147

without purchases, leading to the conclusion that actual purchases might have been made from some other sources in the grey market than the accommodation entry operators from whom generally bills are procured without material. Further, the books of the appellant are audited and no discrepancy in the stock had been ... opinion, in such cases only additional GP on such purchases made from grey market but regularized through the purchase bills taken from accommodation entry operators. can be added to the income of the appellant as extra profit earned on transactions. Therefore, in consistency with the earlier years, the GP rate

Addl.CIT, Special Range-18, New Delhi vs. Jagananth Hemchand Jain, New Delhi

In the result, the appeal of the Revenue as well as Cross Objection of the assessee is dismissed

ITA 7755/DEL/2018[2011-12]Status: DisposedITAT Delhi29 Feb 2024AY 2011-12

Bench: Shri Pradip Kumar Kedia & Shri Yogesh Kumar Us

Section 143(3)Section 145(3)Section 147Section 148Section 148(2)Section 69C

Unit 1(3), Mumbai. The Rajendra Jain Group, Sanjay Choudary Group & Dharmichand Jain I.T.A. Nos.7754 & 7755/Del/2018 4 CO Nos.15 & 16/Del/2023 Group, were Known entry operators of Mumbai indulging in providing accommodation entries in the nature of bogus sales and unsecured loans, 2.1 During the course of search operation, statements ... them to the parties to which sales had been shown in their books of accounts. A list of companies / concerns belonging to these entry operators through which bogus entries given to various beneficiaries has been forwarded to the office of Pr.CIT, Delhi- 18, New Delhi by Dy.CIT, Central Circle

Addl.CIT, Special Range-18, New Delhi vs. Jagananth Hemchand Jain, New Delhi

In the result, the appeal of the Revenue as well as Cross Objection of the assessee is dismissed

ITA 7754/DEL/2018[2010-11]Status: DisposedITAT Delhi29 Feb 2024AY 2010-11

Bench: Shri Pradip Kumar Kedia & Shri Yogesh Kumar Us

Section 143(3)Section 145(3)Section 147Section 148Section 148(2)Section 69C

Snr Electronics Ltd, New Delhi vs. ITO Ward - 24(1), New Delhi

In the result, the appeal of the assessee is dismissed

ITA 937/DEL/2020[2009-10]Status: DisposedITAT Delhi28 Feb 2024AY 2009-10

Bench: Sh. Kul Bharatdr. B. R. R. Kumar

For Appellant: NoneFor Respondent: Ms. Deepti Chandola, Sr. DR

Section 143Section 147Section 148Section 151Section 292CSection 68Section 69C

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH ‘G’, NEW DELHI Before Sh. Kul Bharat, Judicial Member Dr. B. R

Bindal Agencies Pvt Ltd., Chennai vs. ITO, Corporate Ward-1(2), Chennai

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

ITA 1172/CHNY/2023[2012-13]Status: DisposedITAT Chennai27 Feb 2024AY 2012-13

Bench: Shrimanoj Kumar Aggarwal & Shri Manomohan Das

Section 132Section 132(4)Section 143(3)Section 148

action a statement of Mr. VipulVidur Bhatt was recorded u/s 132(4) of the Act wherein, Mr. VipulVidur Bhatt accepted that he is an entry operator and all the searched entities / companies are bogus entities / companies which are used by him for providing various bogus accommodation entries to the various

Shanno Mohammed Yusuf Warsi, Mumbai vs. Income Tax Officer-25(1)(3), Mumbai

In the result, the appeal

ITA 1306/MUM/2023[2013-2014]Status: DisposedITAT Mumbai26 Feb 2024AY 2013-2014

Bench: Shri Om Prakash Kant () & Shri Sandeep Singh Karhail () Assessment Year: 2013-14

For Appellant: Mr. Pankaj SoniFor Respondent: Mr. Manoj Kumar Singh, Sr. DR

Section 147Section 68Section 69C

LTCG, he 14.2 To elaborate it more, when a person needs entry of LTCG, he approaches a s approaches a share broker or entry operator. Entry operator gets him hare broker or entry operator. Entry operator gets him registered with some share broker as a client. Then shares ... listed penny stock are provided to beneficiaries. penny stock are provided to beneficiaries. After a year, beneficiary After a year, beneficiary provides cash to entry operator for having equalling amount o provides cash to entry operator for having equalling amount o provides cash to entry operator for having equalling amount

Pooja Hardware Pvt. Ltd., Mumbai vs. ACIT - 13 (1)(1), Mumbai

In the result, the appeal of the assessee is allowed

ITA 3712/MUM/2018[2012-13]Status: DisposedITAT Mumbai26 Feb 2024AY 2012-13

Bench: Shri Om Prakash Kant () & Shri Sandeep Singh Karhail () Assessment Year: 2012-13

For Appellant: Mr. Vipul Joshi &For Respondent: Mr. H.M. Bhatt, Sr. DR

Section 147Section 35Section 35(1)(i)Section 35(1)(ii)

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH “C” MUMBAI BEFORE SHRI OM PRAKASH KANT (ACCOUNTANT MEMBER) AND SHRI SANDEEP

ITO, Ward- 22(2), New Delhi vs. Saivi Finance Pvt. Ltd., Delhi

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

ITA 3886/DEL/2019[2015-16]Status: DisposedITAT Delhi26 Feb 2024AY 2015-16

Bench: N.K. Billaiya & Ms. Astha Chandraasstt. Year: 2015-16

For Appellant: Shri Kapil Goel, AdvocateFor Respondent: Shri Vivek Kumar Upadhyay, Sr. DR

Section 131Section 133(6)Section 143(3)Section 68

substantially low net asset or worth by Investors, movement of funds from different accounts can be a good basis to have suspicion regarding bogus entry operations and cases of capital formation through routing of such entries, however to conclude the same for affecting an addition, it is necessary that ... when such linkages of fund movement has not been brought on record. The AO has mentioned the standard pattern pertaining to the case of entry operator but nothing in particular brought out on record to state that how it is applicable in the case of appellant to record a finding

True-Man Consultants Pvt. Ltd., Kolkata vs. ITO, Ward-7(2), Kolkata.

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

ITA 1158/KOL/2023[2012-13]Status: DisposedITAT Kolkata23 Feb 2024AY 2012-13

Bench: Sri Rajpal Yadav & Dr. Manish Borad

Section 131Section 142(1)Section 143(2)Section 143(3)Section 14ASection 250Section 68

alleged unexplained cash credit. In all these cases, the Department had alleged that the share application monies were received from persons who were ‘entry operators’ and the monies received by way of share application was nothing but was routing of unaccounted money of assessee in the form of subscription Page

DCIT Central Circle -2(2), Mumbai vs. Shri Viral Saraf Mittal, Mumbai

In the result, appeal filed by the revenue is dismissed

ITA 1843/MUM/2022[2018-19]Status: DisposedITAT Mumbai23 Feb 2024AY 2018-19

Bench: Shri Aby T Varkey, Hon'Ble & Shri S. Rifaur Rahman, Hon'Bledcit – Central Circle – 2(2) V. Viral Saraf Mittal Room No. 806, 8Th Floor 901/902, Capri Heights Old Cgo Annex Building Palli Hill, Bandra (W) M.K. Road, Mumbai - 400020 Mumbai - 400050 Pan: Azbps0317C (Appellant) (Respondent) Assessee Represented By : Shri Sidharth Kothari Department Represented By : Ms. Kavitha Kaushik

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

examined on oath a large number of brokers, directors of companies that finally purchased the shares, the promoters of Penny stock companies, the entry operators who managed the dummy companies involved in price rigging. The money trail of the transactions was also examined and, in a large number of transactions ... Directorate of Investigation of Mumbai and Kolkata as discussed above have proved that Shri Anil Agarwal, Shri Praveen Kumar Jain and associated brokers, entry operators and the assessee had worked out an arrangement in which the shares were acquired by the assessee, the share prices were rigged and then with

ITO 28 (1)(1), Mumbai vs. Gahlot Construction, Mumbai

In the result, the appeal of the revenue & CO of the assessee is dismissed

ITA 2475/MUM/2021[2008-09]Status: DisposedITAT Mumbai23 Feb 2024AY 2008-09

Bench: Shri Br Baskaran, Am & Shri Aby T. Varkey, Jm आयकर अपील सं/ I.T. A. No. 2475/Mum/2021 (निर्धारण वर्ा / Assessment Year: 2008-09) Ito-28(1)(1) बिधम/ M/S. Gahlot Construction Room No. 329, Tower No. Plot No-28A, Gahlot Vs. 6, 3Rd Floor, Vashi Railway Complex, Sector-10, Station, Navi Mumbai- Nerul, Navi Mumbai- 400703. 400703. Cross Objection No. 82/Mum/2023 Arising Out Of I.T.A. No.2475/Mum/2021 (निर्धारण वर्ा / Assessment Year: 2008-09) M/S. Gahlot Construction बिधम/ Ito-28(1)(1) Plot No-28A, Gahlot Room No. 329, Tower Vs. No. 6, 3Rd Floor, Vashi Complex, Sector-10, Nerul, Navi Mumbai-400703. Railway Station, Navi Mumbai-400703. स्थधयी लेखध सं./जीआइआर सं./Pan/Gir No. : Aaofm5698J (अपीलार्थी /Appellant) .. (प्रत्यर्थी / Respondent) Assessee By: Ms. Ritika Agarwal Revenue By: Shri Raj Singh Meel (Sr. Ar) सुनवाई की तारीख / Date Of Hearing: 30/01/2024 घोषणा की तारीख /Date Of Pronouncement: 23/02/2024 आदेश / O R D E R Per Aby T. Varkey, Jm: This Is An Appeal Preferred By The Revenue; & The Assessee Has Filed A Cross Objection (Co) Against The Order Of The Ld. Commissioner Of Income Tax (Appeals)/Nfac, Delhi [Hereinafter Referred To As The “Cit(A)”] Dated 30.10.2021 For The Ay. 2008-09. 2. The Main Grievance Of The Revenue Is Against The Action Of The Ld. Cit(A) Deleting The Addition Of Rs.5 Cr Which Was Added By The

For Appellant: Ms. Ritika AgarwalFor Respondent: Shri Raj Singh Meel (Sr. AR)

Section 132Section 139Section 147Section 151Section 153CSection 68

from two concerns i.e. (i) M/s. Mohit International (Rs.2.5 cr) and (ii) M/s. Natasha Enterprises (Rs.2.5 cr) which were managed and controlled by the entry operator Shri Pravin Kumar Jain (hereinafter “Shri P.K. Jain). Therefore, he re-opened the assessment, and noted that the assessee is in the business ... assessee/or its partners and the statements does not show that assessee/partners indulged in any wrong doing or have availed accommodation entry from these persons (entry operators). Therefore, according to her, the Ld. CIT(A) has rightly not given any weightage to the statements of these persons; and has rightly appreciated

Vicky Fincom Private Limited., Kolkata vs. ACIT, Cir-5(2), Kolkata.

In the result, ITA No. 1362/KOL/2023 is allowed

ITA 1362/KOL/2023[2015-16]Status: DisposedITAT Kolkata22 Feb 2024AY 2015-16

Bench: Sri Rajesh Kumar & Sri Anikesh Banerjee

Section 143(3)Section 234BSection 250