“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

Iwi Stationary Pvt. Ltd., Mumbai vs. ACIT, Circle- 3(2)(1), Mumbai

In the result, appeal filed by the assessee is allowed

ITA 1573/MUM/2023[2015-16]Status: DisposedITAT Mumbai20 Sept 2023AY 2015-16

Bench: Shri Kuldip Singh, Hon'Ble & Shri S. Rifaur Rahman, Hon'Bleiwi Stationary Pvt. Ltd., V. Dcit – Central Circle – 3(2)(1) Aayakar Bhawan 1213, Maker Chamber V Mumbai - 400020 221, Nariman Point Mumbai - 400021 Pan: Aaaci3710N (Appellant) (Respondent)

Section 133(6)Section 250Section 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

Sanjeev Agrawal, New Delhi vs. ACIT, CC-15, New Delhi

In the result, both the appeals of the assessee areallowed

ITA 1519/DEL/2021[2017-18]Status: DisposedITAT Delhi20 Sept 2023AY 2017-18

Bench: Shri Saktijit Dey, Vice-& Shri Girish Agrawal

For Appellant: Shri Gautam Jain & Ms. Monika Aggarwal, AdvsFor Respondent: Shri Ramdhan Meena, Sr. DR

Section 10(38)Section 143(3)

sustained of Rs.3,03,05,713/- by denying the claim of exemption u/s 10(38) and alleged payment of presumptive commission @ 3% to the entry operator for providing long term capital gain (LTCG) by treating it as unexplained expenditure u/s 69C of the Act. 5. Brief fact as culled ... transaction, there has to be some inquiry or material to nail the assessee that she was some kind of a beneficiary in some accommodation entry operation. No defect has been pointed out in the documents submitted by the assessee nor has the broker of the assessee been inquired upon. Simply

Sanjeev Agrawal, New Delhi vs. ACIT, CC-15, New Delhi

In the result, both the appeals of the assessee areallowed

ITA 1518/DEL/2021[2016-17]Status: DisposedITAT Delhi20 Sept 2023AY 2016-17

Bench: Shri Saktijit Dey, Vice-& Shri Girish Agrawal

For Appellant: Shri Gautam Jain & Ms. Monika Aggarwal, AdvsFor Respondent: Shri Ramdhan Meena, Sr. DR

Section 10(38)Section 143(3)

DCIT, New Delhi vs. M/S. Vrindavan Tubes Ltd., Delhi

ITA 5114/DEL/2015[2011-12]Status: DisposedITAT Delhi19 Sept 2023AY 2011-12

Bench: Or During The Hearing Of This Appeal.” Grounds In Cross Objection Filed By The Assessee. “ That On The Facts Of The Case & Under The Law, Ld. Cit(A) Had Erred In Sustaining The Addition/Disallowance Of Rs. 6,95,086/- Being The Provision Of Excise Duty On Finished Goods.” 3. Brief Facts Of The Case Are That, The Assessee Filed Return Of The Assessment Year 2011-12 Declaring An Income Of Rs. 34,40,837/- & The Same Was Processed U/S 143(1) Of The Act. Subsequently, An Assessment Order

Section 133(6)Section 143(1)Section 143(3)Section 68

clear that the person who owned the unaccounted money is reaping the benefit of the same after having utilized the services of the said entry operator who act in form of physically non-existent paper entities and help in laundering of the money. Page 5 of 12 DCIT vs. Vrindavan ... transactions in terms of provisions of Sec 68 of the Act. The amount of Rs. 1,71,00,000/- received from the above entry operator represents the credit entry whose nature and source could not be satisfactorily proved by the assessee and hence it is covered within the mischief

Ketan Jayant Shah, Mumbai vs. DCIT, Circle 1, Thane

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

ITA 568/MUM/2023[2013-14]Status: DisposedITAT Mumbai18 Sept 2023AY 2013-14

Bench: Shri B.R. Baskaran (Am) & Shri Narender Kumar Choudhry (Jm)

Section 10(38)Section 68

providing accommodation entries by way of bogus billing, LTCG, bogus share capital. The AO also referred to the statement of Shri Anuj Agarwal, an entry operator, in which he has explained the methodology adopted for giving accommodation entries. Accordingly, he proposed to assess long term capital gains as income

Ncml Industries Ltd., New Delhi vs. ACIT, CC- 5, New Delhi

In the result, the appeal of the assessee is dismissed

ITA 7820/DEL/2018[2013-14]Status: DisposedITAT Delhi18 Sept 2023AY 2013-14

Bench: Shri C.M. Gargdr. B. R. R. Kumarassessment Year: 2013-14 Ncml Industries Ltd., Vs Acit, 1818, Naya Bazar, Central Circle-5, New Delhi – 110 006. New Delhi. Pan: Aaacn4248A (Appellant) (Respondent) Assessee By : None Revenue By : Shri H. K. Choudhary, Cit-Dr Date Of Hearing : 05.07.2023 Date Of Pronouncement : 18.09.2023

For Appellant: NoneFor Respondent: Shri H. K. Choudhary, CIT-DR

Section 133(6)Section 143(2)Section 153ASection 40A(3)Section 68

Assessing Officer mentioned that during detailed post-search inquiry w.r.t. these parties, it was found that these companies were paper companies operated by entry operators for providing accommodation entries to the assessee as well as other beneficiaries. In para 5.4 of the assessment order, the Assessing Officer mentioned that

Income Tax Officer, Aayakar Bhavan, Majura Gate vs. Shri Gopalbhai T Patel(HUF), Surat

In the result, the grounds of appeal raised by the revenue are dismissed

ITA 498/SRT/2023[2011-12]Status: DisposedITAT Surat18 Sept 2023AY 2011-12

Bench: Shri Pawan Singhआ.अ.सं./Ita No.498/Srt/2023 (Ay 2011-12) (Hearing In Physical Court) Income Tax Officer, Ward Shri Gopalbhai T Patel (Huf) No.2(2)(5) Surat, 2, Vaibhav Bungalow, Vs Room No. 613, Near Radiant High School, Aaykar Bhavan, Surat Gymkhana Road, Surat- Majura Gate, 395007 Surat-395001 Pan Aachg 7284 E अपीलाथ"/Appellant ""थ" /Respondent

Section 10(38)Section 133(6)Section 143(3)Section 148Section 254(1)

assessee admitted that they are passive beneficiary. Further, in that case, there was allegation that purchase and sale of the shares were managed by entry operator. Thus, the facts of the present case are also at variance. 15. Moreover, the tax effect is also less than the monetary limit fixed

DCIT-CC-27, New Delhi vs. Anshika Consultants Pvt Ltd., New Delhi

In the result, Appeal of the Revenue is partly allowed for

ITA 35/DEL/2022[2015-16]Status: DisposedITAT Delhi13 Sept 2023AY 2015-16

Bench: Or At The Time Of Hearing Of The Appeal.” Cross Objection

Section 115JSection 136(6)Section 143(3)Section 14ASection 68

prior to disbursement of loan and no adverse finding regarding identity and existence of the creditors and further no finding that the creditors were entry operators of any kind. All the loans were interest bearing loans and the related interest income is duly reflected in the ITR of the creditor ... prior to disbursement of loan and no adverse finding regarding identity and existence of the creditors and further no finding that the creditors were entry operators of any kind. All the loans were interest bearing loans and the related interest income is duly reflected in the ITR of the creditor

Chaitanya Solvex Pvt. Ltd., Raipur vs. Assistant Commissioner of Income Tax, Circle-1(1), Raipur

In the result, appeal of the assessee in ITA No

ITA 251/RPR/2023[2016-17]Status: DisposedITAT Raipur05 Sept 2023AY 2016-17

Bench: Shri Ravish Sood & Shri Arun Khodpiaआयकर अपील सं. / Ita Nos. 250 & 251/Rpr/2023 "नधा"रण वष" / Assessment Years : 2015-16 & 2016-17 Chaitanya Solvex Private Limited 58, Gandhi Chowk, Neora, Raipur (C.G.)-493 114 Pan : Aaacc9874F .......अपीलाथ" / Appellant बनाम / V/S.

For Appellant: Shri R.B Doshi, CAFor Respondent: Shri Satya Prakash Sharma, Sr. DR

Section 133ASection 143(2)Section 143(3)

आयकर अपील"य अ"धकरण "यायपीठ रायपुर म"। IN THE INCOME TAX APPELLATE TRIBUNAL, RAIPUR BENCH, RAIPUR BEFORE SHRI RAVISH

Chaitanya Solvex Pvt. Ltd., Raipur vs. Assistant Commissioner of Income Tax, Circle-1(1), Raipur

In the result, appeal of the assessee in ITA No

ITA 250/RPR/2023[2015-16]Status: DisposedITAT Raipur05 Sept 2023AY 2015-16

For Appellant: Shri R.B Doshi, CAFor Respondent: Shri Satya Prakash Sharma, Sr. DR

Section 133ASection 143(2)Section 143(3)

आयकर अपील"य अ"धकरण "यायपीठ रायपुर म"। IN THE INCOME TAX APPELLATE TRIBUNAL, RAIPUR BENCH, RAIPUR BEFORE SHRI RAVISH

Jagdish Manilal Desai, Surat vs. The Income Tax Officer, Surat

In the result the ground No

ITA 462/SRT/2023[2007-08]Status: HeardITAT Surat05 Sept 2023AY 2007-08

Bench: Shri Dr. A. L. Sainiआयकर अपील सं./Ita No.462/Srt/2023 Assessment Year: (2007-08) (Virtual Hearing) Jagdish Manilal Desai (Huf), Vs. The Ito, Prop. Hemal Gems, 104, 3Rd Ward – 1(3)(2), Floor, Keshav Jyot Apartment, Surat Lal Bunglow, Athwalines, Surat – 395007 "थायीलेखासं./जीआइआरसं./Pan/Gir No.: Aabhj3074D (Appellant) (Respondent)

Section 143(3)

against the reopening held that the AO has received report from investigation wing Mumbai, which indicate that the assessee is beneficiary of the accommodation entry operators. The accommodation entry provider admitted before investigation wing that he has given such entry to various persons; based on such report ... engaged in providing accommodation entries, held that where after scrutiny assessment the assessing officer received information from the investigation wing that well known entry operators of the country provided bogus entries to various beneficiaries, and assessee was one of such beneficiary, assessing officer was justified in re-opening assessment. Further

ACIT, Circle- 14(1)(1), Mumbai vs. M/S. Akshay Infrastructure Pvt. Ltd., Mumbai

In the result, the appeal filed by the revenue is dismissed

ITA 2923/MUM/2022[2013-14]Status: DisposedITAT Mumbai04 Sept 2023AY 2013-14

Bench: Shri Br Baskaran & Shir Pavan Kumar Gadaleacit, Circle – 14(1)(1) Vs. M/S.Akshayinfrastructure Room No. 432, Pvt Ltd.102, 4Th Floor, Siddhivinayak Chsl, Aayakar Bhavan, Tilak Nagar, M.K. Road, Chembur, Mumbai- 400020. Mumbai-400089 Pan/Gir No. : Aahca2331A Appellant .. Respondent Assessee By : Mr.Ajaysingh&Yogeshjoijode.Ar Revenue By : Mr.Manoj Kumar.Dr Date Of Hearing 03.07.2023 Date Of Pronouncement 04.09.2023 आदेश / O R D E R Per Pavan Kumar Gadale Jm: The Revenue Has Filed The Appeal Against The Order Of The National Faceless Appeal Centre (Nfac), Delhi /Cit(A) Mumbai Passed U/Sec 250 Of The Act. The Revenue Has Raised The Fallowing Grounds Of Appeal. 1."On The Facts & In The Circumstances Of The Case, The Ld. Cit(A) Erred In Deleting The Addition Made By The A.O. Of Rs2,03,00,000/- On Account Of Disallowance U/S 68 Of The Income Tax Act Merely Relying On The Submissions Made By The A.R. Of The Assessee & On The Basis Of

For Appellant: Mr.AjaySingh&YogeshJoijode.ARFor Respondent: Mr.Manoj Kumar.DR

Section 143(2)Section 143(3)Section 68

accommodation entries and the assessee is one of the beneficiary. The AO has relied on the statements recorded and investigations reports in respect of entry operators in the assessment order. Finally the AO ITA Nos. 2923/Mum/2022 M/s Akshay Infrastructure Pvt Ltd., Mumbai. based on the facts and submissions dealt atpage

ITO, New Delhi vs. M/S. Samarth Fincap Services Pvt. Ltd., New Delhi

In the result, appeal of the revenue is partly allowed

ITA 276/DEL/2013[2007-08]Status: DisposedITAT Delhi30 Aug 2023AY 2007-08

Bench: Shri C.M. Garg & Dr. B. R. R. Kumarito, Vs. M/S. Samarth Fincap Services Ward-7(2), Pvt. Ltd, New Delhi F-2, Green Park Main, New Delhi (Appellant) (Respondent) Pan:Aabcs7132F Assessee By : Dr. Rakesh Gupta, Adv Shri Somil Agarwal, Adv Revenue By: Shri Anuj Garg, Sr. Dr Date Of Hearing 06/07/2023 Date Of Pronouncement 30/08/2023

For Appellant: Dr. Rakesh Gupta, AdvFor Respondent: Shri Anuj Garg, Sr. DR

Section 131Section 68

rejoinder of the assessee to the remand report along with all relevant documentary evidence and found that it is not a case of any entry operator and hence, the ld CIT(A) was right in granting relief to the assessee. The ld counsel drawing our attention towards annexures ... going through the submissions of the A.R. of the appellant it is quite clear that this is not a case related to any entry operator and during the course of assessment proceedings, various details including addresses, PAN No., confirmation letters, income tax returns, bank statements and other details relating

Hasmukhbhai B. Patel HUF, Mumbai vs. CIT(Appeals), NFAC, Delhi

In the result, appeals for the assessment years 2014-15 and 2015-16

ITA 702/MUM/2023[2014-15]Status: DisposedITAT Mumbai28 Aug 2023AY 2014-15

Bench: Shri B.R. Baskaran & Shri Sandeep Singh Karhail

For Appellant: Shri Neelkanth a/wFor Respondent: Shri Rajesh Meshram

Section 10(38)Section 143(3)Section 234BSection 250Section 271(1)(c)Section 68

Please explain the modus operandi of the bogus LTCG/STCL entry obtained by the beneficiaries. Ans. Sir, the bogus LTCG entry beneficiary approaches an entry operator who is having a listed company through some agent/mediator or directly. These listed companies are penny stock companies, having no actual business and having ... operator/agent of the operator to provide cash, which can be routed to some other paper/bogus entities to buy these shares from the beneficiary. The entry operator then routes and layers back this cash so received into various paper entities which are controlled and managed by him. These paper entities, which

Hasmukhbhai B. Patel HUF, Mumbai vs. CIT(Appeals), NFAC, Delhi

In the result, appeals for the assessment years 2014-15 and 2015-16

ITA 701/MUM/2023[2013-14]Status: DisposedITAT Mumbai28 Aug 2023AY 2013-14

Bench: Shri B.R. Baskaran & Shri Sandeep Singh Karhail

For Appellant: Shri Neelkanth a/wFor Respondent: Shri Rajesh Meshram

Section 10(38)Section 143(3)Section 234BSection 250Section 271(1)(c)Section 68

Hasmukhbhai B. Patel HUF, Mumbai vs. CIT(Appeals), NFAC, Delhi

In the result, appeals for the assessment years 2014-15 and 2015-16

ITA 700/MUM/2023[2012-13]Status: DisposedITAT Mumbai28 Aug 2023AY 2012-13

Bench: Shri B.R. Baskaran & Shri Sandeep Singh Karhail

For Appellant: Shri Neelkanth a/wFor Respondent: Shri Rajesh Meshram

Section 10(38)Section 143(3)Section 234BSection 250Section 271(1)(c)Section 68

Hasmukhbhai B. Patel HUF, Mumbai vs. CIT(Appeals), NFAC, Delhi

In the result, appeals for the assessment years 2014-15 and 2015-16

ITA 699/MUM/2023[2011-12]Status: DisposedITAT Mumbai28 Aug 2023AY 2011-12

Bench: Shri B.R. Baskaran & Shri Sandeep Singh Karhail

For Appellant: Shri Neelkanth a/wFor Respondent: Shri Rajesh Meshram

Section 10(38)Section 143(3)Section 234BSection 250Section 271(1)(c)Section 68

Chand Monammad, Ajmer vs. ITO, Ward 1(3), Ajmer

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

ITA 340/JPR/2022[2012-12]Status: DisposedITAT Jaipur28 Aug 2023AY 2012-12

Bench: SHRI SANDEEP GOSAIN (Judicial Member), SHRI RATHOD KAMLESH JAYANTBHAI (Accountant Member)

For Appellant: Shri Nikhlesh Kataria, CAFor Respondent: Shri A.S. Nehra, Addl.CIT

Section 139(1)Section 147Section 148Section 151

written submission the Appellant has admitted that he has not done any marble trading and he was only an entry operator He allowed his bank a/c to be used for depositing unaccounted cash of different marble traders of Kishangarh. In these bank a/c's cash was deposited at different stations ... written submission the Appellant has admitted that he has not done any marble trading and he was only an entry operator He allowed his bank a/c to be used for depositing unaccounted cash of different marble traders of Kishangarh. In these bank a/c's cash was deposited at different stations

Arunkumar Gopaldas Agrawal, Mumbai vs. Assistant Commissioner of Income Tax-19(1), Mumbai

Appeal are dismissed

ITA 812/MUM/2023[2012-13]Status: DisposedITAT Mumbai25 Aug 2023AY 2012-13

For Appellant: Shri R.K. SinhaFor Respondent: MS Sanyogita Nagpal

Section 143(3)

imported diamonds which were cleared by the custom house agents which is contrary to the conclusion that the aforesaid concerns were merely acting as entry operators. He submitted that purchases of INR 11,12,70,313/- were declared as bogus by the Assessing Officer without confronting the Assessee with ... clinching evidence to prove that the purchases were bogus. The parties from which purchase were made formed part of Bhanwarlal Jain Group, a known entry operator. In this regard, he placed reliance upon the decision of the Mumbai Bench of the Tribunal in the case of Bhanwarlal M. Jain

Poornima Ramesh Shenoy, Mumbai vs. Income Tax Officer, Ward-30(2)(5) (Presently Ward 41(3)(3), Mumbai

In the result, the appeal by the assessee is allowed

ITA 141/MUM/2023[2014-15]Status: DisposedITAT Mumbai23 Aug 2023AY 2014-15

Bench: Shri Prashant Maharishi & Shri Sandeep Singh Karhail

For Appellant: Shri Suresh Kumar NairFor Respondent: Shri Prasoon Kabra

Section 10(38)Section 142(1)Section 143(2)Section 143(3)Section 250Section 68

meticulous paper work by the appellant in making investment in unknown stock and then selling the same as per convenience of the broker and entry operator by rigging prices at astronomical rate shows that the AO has been compelled to examine the entire transactions in the light of the surrounding