Ram Prakash Bhatia Vs DCIT (ITAT Delhi)
Entry Operator Can Be Taxed Only on Commission @0.15%: Once Accommodation Entry Business Is Accepted, Whole Bank Credits Can’t Be Taxed:
Delhi ITAT ‘E’ Bench in Shri Ram Prakash Bhatia vs DCIT (ITA Nos.1477 to 1481/Del/2024, AYs 2011-12 to 2015-16, order dated 24-12-2025) partly allowed the assessee’s appeals and held that where the assessee is admittedly an accommodation entry provider, only commission income can be taxed and not the entire bank credits or fund rotations.
The assessee was subjected to survey on 08-08-2014 and admitted to providing bogus bills and accommodation entries. Reassessment was completed earlier and later revised u/s 263. In the fresh order u/s 263 r.w.s. 147 dated 28-03-2022, AO made:
- addition of ₹46.18 crore u/s 68 treating entire bank credits as unexplained, and
- addition towards commission on both debit and credit entries, leading to an assessed income of over ₹41 crore for AY 2011-12 alone.
CIT(A) upheld the action for all five years.
ITAT noted that in assessee’s own case for earlier and subsequent years, coordinate benches had consistently held that:
- assessee is an entry operator,
- bank entries represent accommodation transactions, and
- only commission income @0.15% on credit entries is taxable, considering multiple fund rotations.
Following its own earlier orders (AYs 2011-12 & 2012-13), ITAT held that:
