“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

Roselabs Polymers Limited, Ahmedabad vs. DCIT, Circle-3(1)(2), Ahmedabad

In the result, the appeal filed by the Assessee is dismissed in limine

ITA 425/AHD/2019[2012-13]Status: DisposedITAT Ahmedabad21 Feb 2024AY 2012-13

Bench: Ld. Cit(A) For The Assessment Year 2012-13 An Exparte Appellate Order Was Passed. For The Assessment Year 2012-13 One Shri Sagar Vasoya Appeared Before Ld. Cit(A), However The Assessee Appeal Was Dismissed By A Detailed Speaking Order.

Section 143(3)Section 68

means of share capital or application in the company. Although in the said judgment it was established that investment was made through accommodation entry operator, going to the facts of the case under consideration and although it is not proved that M/s. Gopalka Motor Investo Pvt. Ltd. and others were ... accommodation entry operators, the facts and circumstances go on to prove that A.O, was right in questioning identity, genuineness and creditworthiness of the investors in its share capital in the said judgment delivered by Hon'ble Tribunal, appellant had also submitted all the necessary documentation such as audited accounts, Return

Roselabs Polymers Limited, Ahmedabad vs. The Deputy Commissioner of Income Tax, Circle-3(1)(2), Ahmedabad

In the result, the appeal filed by the Assessee is dismissed in limine

ITA 28/AHD/2018[2013-14]Status: DisposedITAT Ahmedabad21 Feb 2024AY 2013-14

Section 143(3)Section 68

Vrinda Engineers Pvt. Ltd., Kolkata vs. PCIT, Cer-1, Kolkata.

In the result, both the appeals of the assessee are allowed

ITA 1274/KOL/2023[2012-13]Status: DisposedITAT Kolkata21 Feb 2024AY 2012-13

Bench: Shri Rajpal Yadav, Vice-(Kz) & Dr. Manish Boradi.T.A. Nos. 1274/Kol/2023 Assessment Year: 2012-2013 Vrinda Engineers Pvt. Ltd.,.......................Appellant C/O. Subash Agarwal & Associates, Advocates, Siddha Gibson, 1, Gibson Lane, Suite-213, 2Nd Floor, Kolkata-700069 [Pan: Aaacv9131E] -Vs.- Principal Commissioner Of Income Tax,....Respondent Central-1, Kolkata, Aayakar Bhawan Poorva, 110, Shantipally, E.M. Bypass, Kolkata-700107 -A N D- I.T.A. Nos. 1232/Kol/2023 Assessment Year: 2012-2013 Vrinda Engineers Pvt. Ltd.,.......................Appellant C/O. Subash Agarwal & Associates, Advocates, Siddha Gibson, 1, Gibson Lane, Suite-213, 2Nd Floor, Kolkata-700069 [Pan: Aaacv9131E] -Vs.- Assistant Commissioner Of Income Tax,....Respondent Central Circle-1(1), Kolkata, Aayakar Bhawan Poorva, 110, Shantipally, E.M. Bypass, Kolkata-700107

Section 142(1)Section 143(3)Section 263Section 4

which are also shell/paper companies. Reportedly, M/s Rupali Financial i consultants Pvt. Ltd. is a shell company, which is controlled and managed by entry operator Shri Ravi Newatia. During the year under consideration, the assessee-company has received a sum of Rs. 13,00,000/- from the bank account

Vrinda Engineers Pvt. Ltd., Kolkata vs. ACIT, C.C-1(1), Kolkata.

In the result, both the appeals of the assessee are allowed

ITA 1232/KOL/2023[AAACV9131E]Status: DisposedITAT Kolkata21 Feb 2024

Section 142(1)Section 143(3)Section 263Section 4

Vish Realty Solutions Private Limited, Kolkata vs. I.T.O., Ward-5(3), Kolkata

In the result, appeal of the revenue is dismissed

ITA 250/KOL/2020[2012-13]Status: DisposedITAT Kolkata21 Feb 2024AY 2012-13

Bench: Shri Sanjay Garg, Hon’Ble & Dr. Manish Borad, Hon’Blei.T.A. No. 250/Kol/2020 Assessment Year: 2012-13 Vish Realty Solutions Private Limited Income Tax Officer, Ward-5(3), 55, Ezra Street Vs Kolkata 2Nd Floor Kolkata - 700001 [Pan : Aadcv9938N] अपीलाथ"/ (Appellant) "" यथ"/ (Respondent) Assessee By : Shri S. Jhajharia, A/R Revenue By : Shri Vineet Kumar, Addl. Cit, D/R सुनवाई क" तारीख/Date Of Hearing : 16/01/2024 घोषणा क" तारीख /Date Of Pronouncement: 21/02/2024 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 Commissioner Of Income Tax (Appeals) -10 (Hereinafter The “Ld. Cit(E)”) Dt. 02/12/2019, Passed U/S 263 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. That The Learned Commissioner Of Income Tax (Appeals)-Io, Kolkata Erred In Passing An Order Dated 2Nd Of December, 2019 Under Section 143(3) Of The Income Tax Act, 1961 Dismissing The Appeal Of The Appellant Without Allowing Reasonable Opportunity Of Being Heard. 2. That The Learned Commissioner Of Income Tax (Appeals) - 10, Kolkata Erred In Confirming The Addition Of Share Application Money Ofrs. 5,86,00,000/- Made By The Assessing Officer Under Section 68 Of The Income Tax Act, 1961 On Irrelevant Considerations & Arbitrary Grounds.

For Appellant: Shri S. Jhajharia, A/RFor Respondent: Shri Vineet Kumar, Addl. CIT, D/R

Section 143(2)Section 143(3)Section 14ASection 263Section 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

Reliance Corporation, Mumbai vs. Dy. CIT Central Circle - 1, Thane

In the result, all the three appeals of the assessee are allowed

ITA 2725/MUM/2023[2013-14]Status: DisposedITAT Mumbai20 Feb 2024AY 2013-14

Bench: Shri B.R. Baskaran (Am) & Shri Sandeep Singh Karhail (Jm)

Section 147Section 68

doubt. 18. We find ourselves in agreement with the submissions of the assessee’s counsel. We note that except for the statement of the entry operator which was also retracted the addition made by the authorities below is devoid of cogent material. In this regard we note that in similar

Reliance Corporation, Mumbai vs. Dy. CIT Central Circle - 1, Thane

In the result, all the three appeals of the assessee are allowed

ITA 2724/MUM/2023[2011-12]Status: DisposedITAT Mumbai20 Feb 2024AY 2011-12

Bench: Shri B.R. Baskaran (Am) & Shri Sandeep Singh Karhail (Jm)

Section 147Section 68

Reliance Corporation, Mumbai vs. Dy. CIT, Central Circle - 1, Thane

ITA 2723/MUM/2023[2014-15]Status: DisposedITAT Mumbai20 Feb 2024AY 2014-15

Bench: Shri B.R. Baskaran (Am) & Shri Sandeep Singh Karhail (Jm)

Section 147Section 68

doubt. 18. We find ourselves in agreement with the submissions of the assessee's counsel. We note that except for the statement of the entry operator which was also retracted the addition made by the authorities below is devoid of cogent material. In this regard we note that in similar

Tanuj Properties Private Limited., Kolkata vs. I.T.O, Ward-9(1), Kolkata.

In the result, the appeal of the assessee stands allowed

ITA 1045/KOL/2023[2012-13]Status: DisposedITAT Kolkata19 Feb 2024AY 2012-13

Bench: Shri Sanjay Garg & Shri Girish Agrawali.T.A. No.1045/Kol/2023 Assessment Year : 2012-13 Tanuj Properties Pvt. Ltd. (Successor To Darshan Tradelink Pvt. Ltd……………….…………....Appellant 6Th Floor, Unit-6A, 238A, A.J.C. Bose Road, L.R. Sarani S.O., Kolkata - 700020 [Pan: Aacct4910B] Vs. Ito, Ward-9(1), Kolkata…………….................................…..…..... Respondent Appearances By: Shri Akkal Dudhewala, Ar, Appeared On Behalf Of The Appellant. Shri Bonnine Debarma, Addl. Cit-Dr, Appeared On Behalf Of The Respondent. Date Of Concluding The Hearing : January 22, 2024 Date Of Pronouncing The Order : February 19, 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 20.09.2023 Of The National Faceless Appeal Centre [Hereinafter Referred To As The ‘Cit(A)’] Passed U/S 250 Of The Income Tax Act (Hereinafter Referred To As The ‘Act’). 2. The Assessee In This Appeal Has Taken The Following Grounds Of Appeal: “1. A) For That On The Facts & In The Circumstances Of The Case, The Order U/S 147/143(3) Was Passed By The A.O Who Did Not Hold Valid Jurisdiction & Therefore The Impugned Order Being Ab Initio Void Deserves To Be Quashed. B) For That On The Facts & In The Circumstances Of The Case, The Notice U/S 148 Of The Act Was Issued In The Name Of Non-Existent Entity & In

Section 147Section 148Section 250

accounts without paying the due taxes. 2.4 The detailed investigation report containing the modus operandi of tax evasion through penny stock and discussion in entry operators from brokers and scripts has been provided along with the letter of DDIT (Inv) Mumbai. 2.5. Our assessee is one of the beneficiary

Dreamtech Constructions Pvt. Ltd., New Delhi vs. DCIT Circle-7(1), New Delhi

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

ITA 91/DEL/2021[2012-13]Status: DisposedITAT Delhi16 Feb 2024AY 2012-13

Bench: or at the time of hearing of the appeal.”

Section 143(3)Section 68

Revenue failed to bring any concrete material on record to prove the share applicants are bogus or the assessee was a beneficiary of any entry operation or received entries from the established entry operators of the Department. As held in the cases cited above, before fastening any liability upon

Dreamtech Constructions Pvt Ltd., Delhi vs. DCIT Circle-10(1), New Delhi

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

ITA 90/DEL/2021[2011-12]Status: DisposedITAT Delhi16 Feb 2024AY 2011-12

Bench: or at the time of hearing of the appeal.”

Section 143(3)Section 68

P.L. Goenka HUF, Kolkata vs. ITO, Ward 29/4, Kolkata

In the result, appeal of the assessee is allowed

ITA 412/KOL/2023[2013-14]Status: DisposedITAT Kolkata09 Feb 2024AY 2013-14

Bench: Shri Rajpal Yadav, Hon’Ble & Dr. Manish Borad, Hon’Ble

For Appellant: Shri K.M. Roy, C.AFor Respondent: Shri Gautam Patra, Addl. CIT, D/R

Section 143(1)Section 147Section 250

been made regarding the source deposits/credits in the bank accounts of the entities mentioned above. Eventually the partners/directors of the companies and the entry operators have admitted on oath that they have provided accommodation entries to the beneficiaries. Hence undoubtedly this is a scheme I.T.A. No. 412 /Kol/2023 Assessment Year ... Goenka HUF 3 of ORGANISED TAX EVASION accomplished through farrago of artificially inserted - transactions, having no commercial rationale, by a cartel of entry operators, broilers and exit providers. I have gone through the information available with the office and it is seen that the assessee filed return of income

Manish Mahipatrai Shah, Mumbai vs. CIT(Appeal), Mumbai

ITA 867/MUM/2022[2014-15]Status: DisposedITAT Mumbai08 Feb 2024AY 2014-15

Bench: Shri Aby T. Varkey, Jm & Shri S Rifaur Rahman, Am आयकर अपील सं/ I.T.A. No.867/Mum/2022 (निर्धारण वर्ा / Assessment Year: 2014-15) Manish Mahipatrai Shah बिधम/ Cit(A)/Nfac 404, Commerce House, Mumbai. Vs. Nagindas Master Road Fort, Mumbai-400023. स्थधयी लेखध सं./जीआइआर सं./Pan/Gir No. : Asfps9884D (अपीलार्थी /Appellant) .. (प्रत्यर्थी / Respondent) Assessee By: Shri Vimal Punamiya Revenue By: Shri Biswanath Das (Dr) सुनवाई की तारीख / Date Of Hearing: 23/01/2024 घोषणा की तारीख /Date Of Pronouncement: 08/02/2024 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 30.03.2022 For The Assessment Year 2014-15. 2. The Main Grievance Of The Assessee Is Against The Action Of The Ld. Cit(A) Upholding The Action Of The Ao Disallowing The Long Term Capital Gain (Ltcg) Claimed By The Assessee In Respect Of Sale Of Shares M/S. Sunrise Asian Limited (Hereafter “M/S. Sunrise”) Of Rs.11,89,44,328/- U/S 68 Of The Income Tax Act, 1961 (Hereinafter “The Act”). & Thus Denying Deduction U/S 10(38) Of The Act As Well As Upholding Addition Of Rs.59,47,261/- As Commission For Arranging The Bogus Ltcg (5% Of Commission) U/S 69C Of The Act.

For Appellant: Shri Vimal PunamiyaFor Respondent: Shri Biswanath Das (DR)

Section 10(38)Section 132(4)Section 147Section 68Section 69C

scrip of M/s. Sunrise was one of the eighty four (84) penny stocks that were 3 A.Y. 2014-15 Manish Mahipatrai Shah used by entry operators for converting unaccounted money of beneficiaries like assessee in the garb of LTCG/loss, disbelieved the genuinity of the transaction. The AO in the assessment ... order explained the modus operandi followed by the entry operators for providing accommodation entries to beneficiaries like assessee in the garb of LTCG/loss; and he wondered as to how the price of a share of M/s. Sunrise purchased at Rs.20/- would command up to Rs.496/- per share in span

Udaykumar Prabhudas Shah, Mumbai vs. ITO Ward 29(3)(1), Mumbai

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

ITA 883/MUM/2023[2014-15]Status: DisposedITAT Mumbai07 Feb 2024AY 2014-15

Bench: Shri Aby T Varkey, Hon’Ble & Shri S. Rifaur Rahman, Hon'Bleudaykumar Prabhudas Shah V. Income Tax Officer – Ward – 29(3)(1) Kautilya Bhavan 1601 Moksh Mahal Bandra Kurla Complex P.K. Road, Sarvodaynagar, Bandra (E), Mumbai - 400051 Mulund, Mumbai – 400080 Pan: Alyps8682D (Appellant) (Respondent) Assessee Represented By : Shri Dharan Gandhi Department Represented By : Ms. Kavitha Kaushik

Section 234BSection 271(1)(c)Section 68

booking LTCG and share were purchased by the determined buyer. 7. The assessee has no nexus or any relation with company, its director or entry operator. Page 6 of 15 Udaykumar Prabhudas Shah 8. The assessee may have got only incidental benefit of price rise. 9. The opportunity of cross ... bogus, specific evidence has to be brought on record by the Revenue to prove that the assessee was involved in the collusion with the entry operator/ stock brokers for such an arrangements. In absence of such finding, it is not justifiable to link the fact or the finding unearthed

Bharat De vs. Hi Dagha, Thanevs.ITO Ward 3(1), Kalyan

In the result, both the appeals of the assessee are dismissed

ITA 3315/MUM/2023[2009-10]Status: DisposedITAT Mumbai07 Feb 2024AY 2009-10

Bench: Shri Om Prakash Kant () & Ms. Kavitha Rajagopal () Assessment Year: 2009-10 & Assessment Year: 2010-11 Bharat Devshi Dagha, Ito, Ward 3(1), 3/13, Geet Govind Chs. Rani Mansion Manpada Road, Vs. Maharashtra-421301. Dombivli East-421 201. Pan No. Aarpd 9399 Q Appellant Respondent

For Appellant: Mr. Kalpesh Khatri, CAFor Respondent: Mr. Surendra Kumar Meena, Sr. DR

Section 147Section 148

assessee racket and further amounts were actually found in books of assessee to be credited in n to be credited in name of alleged entry operators, burden was on ame of alleged entry operators, burden was on assessee to prove that it was not a beneficiary of racket ... assessee that the Assessing Officer allow the ground of appeal of the assessee that the Assessing Officer had erred in not making availablethe said entry operators for his cros had erred in not making availablethe said entry operators for his cros had erred in not making availablethe said entry operators

Bharat De vs. Hi Dagha, Thanevs.ITO Ward 3(1), Kalyan

In the result, both the appeals of the assessee are dismissed

ITA 3314/MUM/2023[2010-11]Status: DisposedITAT Mumbai07 Feb 2024AY 2010-11

For Appellant: Mr. Kalpesh Khatri, CAFor Respondent: Mr. Surendra Kumar Meena, Sr. DR

Section 147Section 148

Udayan Grover, Mumbai vs. National Faceless Appeal Centre(NFAC), Delhi

In the result, appeal filed by the assessee is allowed

ITA 2880/MUM/2023[2015-16]Status: DisposedITAT Mumbai07 Feb 2024AY 2015-16

Bench: Shri Aby T Varkey, Hon'Ble & Shri S. Rifaur Rahman, Hon'Bleudayan Grover V. National Faceless Appeal Centre Panch Mahal Delhi Panch Sristhi Complex {Acit – 26(3), Bkc, Mumbai} Powai, Mumbai - 400072 Pan: Aclpg0572G (Appellant) (Respondent) Assessee Represented By : Shri Vimal Punmiya Department Represented By : Ms. Kavitha Kaushik

Section 10(38)Section 131Section 133(6)Section 142(1)Section 143(2)Section 57Section 68

states that – Page No. 20 Udayan Grover During the course of Investigation of LTCG Scam, the investigation wing, Kolkata has covered more than 25 Entry operators. These operators have formed a group of Jamakharchi companies, for facilitating bogus LTCG/STCG. Many entry operators have been covered U/S 133A ... Channel and reflected in Bank Statement. (Pg No. 84-92 of Paper Book) xv. There are no evidences that assessee given cash to any entry operators. xvi. The assessee also submitted copy of Demat Account where the said share inwards and outwards clearly reflected in Transaction statement issued by India

Nova Estates Pvt Ltd, New Delhi vs. ITO Ward - 18(4), New Delhi

In the result appeal of the assessee is dismissed

ITA 76/DEL/2021[2007-08]Status: DisposedITAT Delhi07 Feb 2024AY 2007-08

Bench: The Ld. Ao & Despite Such Scrutiny No Addition Was Made In The Original Assessment Proceedings.

Section 143(3)Section 147Section 148Section 68Section 69C

same. 13. That the Ld. CIT (A) failed to appreciate that there is no allegation of any accommodation entry or statement of any such entry operator in the case of the appellant and the addition is solely made on the basis of material which the appellant is not aware

DCIT Central Circle-26, New Delhi vs. Shivji Garments Pvt Ltd, New Delhi

In the result, the appeals of the Revenue are dismissed and Cross objections of the assesee are dismissed as not pressed

ITA 9642/DEL/2019[2016-17]Status: DisposedITAT Delhi06 Feb 2024AY 2016-17

Bench: Shri Challa Nagendra Prasaddr. B. R. R. Kumar

For Appellant: Ms. Shilpi Jain, AdvFor Respondent: Ms. Amisha Gupt, CIT-DR

Section 132Section 143(3)Section 153C

charging of commission is concerned, it has been held in the case of Sh. Anand Jain and Sh. Naresh Jain that they were entry operators who were managing and controlling various shell concerns including the appellant for providing accommodation entries in lieu of commission. Accordingly, taking that logic there ... charging of commission is concerned, it has been held in the case of Sh. Anand Jain and Sh. Naresh Jain that they were entry operators who were managing and controlling various shell concerns including the appellant for providing accommodation entries in lieu of commission. Accordingly, taking that logic there

DCIT Central Circle-26, New Delhi vs. Shivji Garments Pvt Ltd, New Delhi

In the result, the appeals of the Revenue are dismissed and Cross objections of the assesee are dismissed as not pressed

ITA 9641/DEL/2019[2015-16]Status: DisposedITAT Delhi06 Feb 2024AY 2015-16

Bench: Shri Challa Nagendra Prasaddr. B. R. R. Kumar

For Appellant: Ms. Shilpi Jain, AdvFor Respondent: Ms. Amisha Gupt, CIT-DR

Section 132Section 143(3)Section 153C