JUDGMENT judgment of court was delivered by Sanjiv Khanna J.-The Revenue in this appeal, which relates to assessment year 2002-03, has raised following substantial question of law: "Whether Income-tax Appellate Tribunal fell into error in upholding deletion of Rs. 54 lakhs, which was directed to be added back by virtue of section 68 of Income-tax Act, 1961, on ground that assessee has discharged onus of proving identity and creditworthiness of share subscriber and genuineness of subscription?" appeal arises out of impugned order dated October 31, 2011, passed by Income-tax Appellate Tribunal upholding order passed by Commissioner of Income-tax (Appeals) deleting addition of Rs. 54,00,000 made under section 68 of Income-tax Act, 1961 ("the Act", for short), by Assessing Officer on account of share application. assessee, company, had filed their return of income for assessment year 2002-03 declaring loss of Rs. 1,58,035 on October 20, 2002, which was processed under section 143(1) of Act. Subsequently, on basis of report submitted by Investigation Wing that assessee was recipient of accommodation entries in form of share application money/share capital/share premium, notice under section 147 read with section 148 of Act was issued and served on March 25, 2009. assessee, in response, pleaded that return filed earlier under section 139(1) on October 20, 2002, may be considered as return filed pursuant to said notice. In response to assessee's letter dated April 18, 2009, reasons recorded for issue of notice under section 147/148, were communicated to respondent- assessee on September 2, 2009. authorized representative of assessee appeared on September 9, 2009, and sought adjournment for providing documents, evidence, etc., in response to notice under section 143(2), which was issued on September 2, 2009. case was adjourned to September 11, 2009, but no one attended proceedings and belatedly on September 14, 2009, request for adjournment was made on ground that authorized representative was ill. To give further opportunity, proceeding was adjourned to September 22, 2009, and other details were sought. On September 22, 2009, again request for adjournment was made. On said date, questionnaire along with notice under sections 142(1) and 143(2) was issued, fixing hearing on October 8, 2009. On October 8, 2009, authorized representative of respondent-assessee once again requested for time on ground that requisite information was under preparation/compilation. assessee was required to furnish details of shareholders who were allotted shares in year under consideration, their confirmations, copy of income-tax returns, bank accounts, copy of share certificate issued, allotment letter, etc. case was adjourned to October 22, 2009, but said hearing yet again remained unattended. Belatedly, on November 17, 2009, part information was furnished by authorized representative. Further details were required to be furnished. On November 17, 2009, assessee raised objection to reopening and submitted that reasons for reopening were merely surmises and conjectures. It was stated that five amounts aggregating to Rs. 47,00,000, which were mentioned twice in list prepared by Investigation Wing, did not relate to them. However, assessee accepted that they had received six amounts aggregating to Rs. 54,00,000 as per details given below: Date A/c Instrument Name of Bank Branch of Beneficiary Beneficiary Value of on which No. of entry Beneficiary Beneficiary Value of on which No. of entry No. by which account holder of from which entry giving bank name bank branch entry taken entry giving entry taken entry giving A/c entry given bank taken account HDFC Rejender 7-3- Sekhawati 700000 972521 SBP Daryaganj 50111 Bank Nagar Mkt., ND 02 Finance P. Ltd. Old 13- D. K. Ispat HDFC Rajender Nagar, 1000000 SBP do 50090 3-02 and Timber Ltd. ND 13- Kuberso HDFC do 650000 SBP do 50084 3-02 Sales P.Ltd. Dinanath 14- Luhariwal HDFC do 1200000 SBP do 50103 3-02 Spinning Mills Ltd. Technocom 16- HDFC do 850000 33834 Associates P. Innovatiye Wazirpur 220 3-02 Ltd. 18- Chintpuri HDFC do 1000000 SBP DG 50058 3-02 cre-dits Total 5400000 assessee did not appear in proceedings held on November 25, 2009. However, Assessing Officer wrote detailed questionnaire for information and compliance and fixed hearing on December 2, 2009. Summons under section 131 of Act were sent to alleged shareholders and they were asked to furnish details on December 10, 2009. directors/principal officers were required to personally come and depose. summons, as per assessment order, were received back unserved. At same time, assessee filed details and confirmations of alleged share capital. Earlier on December 8, 2009, detailed show-cause notice was issued, fixing hearing on December 14, 2009. assessee was asked to produce shareholders along with their books of account to substantiate its claim of genuineness of cash credits. In fact on December 10, 2009, authorized representative had appeared and he was apprised that summons issued to shareholders under section 131 had been received back unserved in five cases and he was requested to provide present postal address of parties. In meanwhile, Assessing Officer managed to get hold of bank statements of shareholders, who had allegedly made deposits by way of cheques and pay orders. assessment order specifically records that huge cash deposits in lakhs were being regularly deposited in said accounts and then pay orders/cheques were issued to respondent- assessee. On December 14, 2009, authorized representative appeared and stated that assessee was unable to produce directors or principal officers of six shareholder companies pleading that they were not shareholders now and seven years had passed since transactions took place. assessment order records and mentions about transactions recorded in bank accounts of shareholder/entry operator companies to show and establish that there was immediate deposit of cash and then issue of cheques. It was further mentioned that these companies were under control of one Mahesh Garg and his group, who were operating various accounts. Assessing Officer made addition of Rs. 54,00,000 under section 68 of Act and Rs. 1,08,000 as commission paid for procuring said shares being 2 per cent. of Rs. 54,00,000. Commissioner of Income-tax (Appeals) deleted aforesaid additions on merits. However, he upheld issuance of notice under section 147/148 of Act. He observed that respondent-assessee had submitted various letters/documents in support of genuineness of transactions towards share capital subscribed, but this was rejected by Assessing Officer without adducing even single instance of infirmity and shortcoming. said evidence was in form of share application forms, copy of bank statements of share subscribers from where share application amount was paid, confirmation of companies towards investment in share capital, certificate of incorporation with copy of memorandum and articles of association, copy of PAN card, ITR, etc. Thus, it was held that assessee was able to prove identity of shareholders, genuineness of transactions and there was no room for doubt and suspicion. Assessing Officer, it was observed, had not made any inquiries regarding fact that assessee had been given accommodation entries and had routed their undisclosed income in guise of share application money. Reference was made to several decisions of Delhi High Court in support. Revenue preferred appeal before Tribunal and cross-objections were filed by assessee. appeal of Revenue has been dismissed. cross-objections filed by respondent-assessee to reopening were disposed of as infructuous, observing that they have become academic and did not require adjudication. We have heard senior standing counsel for Revenue, who has relied upon decisions of Delhi High Court in CIT v. Nova Promoters and Finlease (P) Ltd. [2012] 342 ITR 169 (Delhi), CIT v. NR Portfolio Pvt. Ltd. [2014] 2 ITR-OL 68 (Delhi); 206 (2014) DLT 97 (DB) (Del) and CIT v. MAF Academy P. Ltd. [2014] 361 ITR 258 (Delhi); 206 (2014) DLT 277 (DB) (Del). aforesaid decisions mentioned above refer to earlier decisions of Delhi High Court in CIT v. Sophia Finance Ltd. [1994] 205 ITR 98 (Delhi) [FB], CIT v. Divine Leasing and Finance Ltd. [2008] 299 ITR 268 (Delhi) and observations of Supreme Court in CIT v. Lovely Exports P. Ltd. [2008] 319 ITR (St.) 5 (SC). main submission of learned counsel for assessee is that once assessee had been able to show that shareholder companies were duly incorporated by Registrar of Companies, their identity stood established, genuineness of transactions stood established as payments were made through accounts payee cheques/bank account and mere deposit of cash in bank accounts prior to issue of cheque/pay orders, etc., would only raise suspicion and it was for Assessing Officer to conduct further investigation but it did not follow that money belonged to assessee and was their unaccounted money, which had been channelized. As we perceive, there are two sets of judgments and cases but these judgments and cases proceed on their own facts. In one set of cases, assessee produced necessary documents/evidence to show and establish identity of shareholders, bank account from which payment was made, fact that payments were received thorough banking channels, filed necessary affidavits of shareholders or confirmations of directors of shareholder companies but thereafter no further inquiries were conducted. second set of cases are those where there was evidence and material to show that shareholder company was only paper company having no source of income but had made substantial and huge investments in form of share application money. Assessing Officer has referred to bank statement, financial position of recipient and beneficiary assessee and surrounding circumstances. primary requirements, which should be satisfied in such cases is, identification of creditors/ shareholder, creditworthiness of creditors/shareholder and genuineness of transaction. These three requirements have to be tested not superficially but in depth having regard to human probabilities and normal course of human conduct. Certificate of incorporation, PAN number, etc., are relevant for purchase of identification but have their limitation when there is evidence and material to show that subscriber was paper company and not genuine investor. It is in this context, Supreme Court in CIT v. Durga Prasad More [1971] 82 ITR 540 (SC) had observed (page 545): "Now, we shall proceed to examine validity of those grounds that appealed to learned judges. It is true that apparent must be considered real until it is shown that there are reasons to believe that apparent is not real. In case of present kind party who relies on recital in deed has to establish truth of those recitals, otherwise it will be very easy to make self-serving statements in documents either executed or taken by party and rely on those recitals. If all that assessee who wants to evade tax is to have some recitals made in document either executed by him or executed in his favour then door will be left wide open to evade tax. little probing was sufficient in present case to show that apparent was not real. taxing authorities were not required to put on blinkers while looking at documents produced before them. They were entitled to look into surrounding circumstances to find out reality of recitals made in those documents." Summarizing legal position in Nova Promoters and Finlease (P) Ltd. (supra), and highlighting legal effect of section 68 of Act, Division Bench has held as under (page 192): "The Tribunal also erred in law in holding that Assessing Officer ought to have proved that monies emanated from coffers of assessee- company and came back as share capital. Section 68 permits Assessing Officer to add credit appearing in books of account of assessee if latter offers no explanation regarding nature and source of credit or explanation offered is not satisfactory. It places no duty upon him to point to source from which money was received by assessee. In A. Govindarajulu Mudaliar v. CIT [1958] 34 ITR 807 (SC) this argument advanced by assessee was rejected by Supreme Court. Venkatarama Aiyar J., speaking for court, observed as under (at page 810): 'Now, contention of appellant is that assuming that he had failed to establish case put forward by him, it does not follow as matter of law that amounts in question were income received or accrued during previous year, that it was duty of Department to adduce evidence to show from what source income was derived and why it should be treated as concealed income. In absence of such evidence, it is argued, finding is erroneous. We are unable to agree. Whether receipt is to be treated as income or not, must depend very largely on facts and circumstances of each case. In present case, receipts are shown in account books of firm of which appellant and Govindaswamy Mudaliar were partners. When he was called upon to give explanation he put forward two explanations, one being gift of Rs. 80,000 and other being receipt of Rs. 42,000 from business of which he claimed to be real owner. When both these explanations were rejected, as they have been it was clearly open to Income-tax Officer to hold that income must be concealed income. There is ample authority for position that where assessee fails to prove satisfactorily source and nature of certain amount of cash received during accounting year, Income-tax Officer is entitled to draw inference that receipt are of assessable nature. conclusion to which Appellate Tribunal came appears to us to be amply warranted by facts of case. There is no ground for interfering with that finding, and these appeals are accordingly dismissed with costs.' (emphasis supplied) Section 68 recognizes aforesaid legal position. view taken by Tribunal on duty cast on Assessing Officer by section 68 is contrary to law laid down by Supreme Court in judgment cited above. Even if one were to hold, albeit erroneously and without being aware of legal position adumbrated above, that Assessing Officer is bound to show that source of unaccounted monies was coffers of assessee, we are inclined to think that in facts of present case such proof has been brought out by Assessing Officer. statements of Mukesh Gupta and Rajan Jassal, entry providers, explaining their modus operandi to help assessee's having unaccounted monies convert same into accounted monies affords sufficient material on basis of which Assessing Officer can be said to have discharged duty. statements refer to practice of taking cash and issuing cheques in guise of subscription to share capital, for consideration in form of commission. As already pointed out, names of several companies which figured in statements given by above persons to Investigation Wing also figured as share applicants subscribing to shares of assessee-company. These constitute materials upon which one could reasonably come to conclusion that monies emanated from coffers of assessee-company. Tribunal, apart from adopting erroneous legal approach, also failed to keep in view material that was relied upon by Assessing Officer. Commissioner of Income-tax (Appeals) also fell into same error. If such material had been kept in view, Tribunal could not have failed to draw appropriate inference." In said case, Division Bench had also examined decision of Supreme Court in Lovely Exports P. Ltd. (supra) and other cases in which assessee had succeeded. It was noticed that in case of Lovely Exports P. Ltd. affidavits/confirmations of shareholders were filed and income-tax record numbers of shareholders were made available, but Assessing Officer, who had sufficient time, failed to carry out inquiry and examination. Reference was made to observations in Divine Leasing (supra) to effect that there cannot be two opinions on aspect that pernicious practice of conversion of unaccounted money through masquerade or channel of investment as share capital must be firmly excoriated by Revenue but when there is preponderance of evidence to show absence of culpability, assessee should not be harassed by Revenue. delicate balance must be maintained between two interests. In Divine Leasing (supra), following proposition was elucidated (page 282): "In this analysis, distillation of precedents yields following propositions of law in context of section 68 of Income-tax Act. assessed has to prima facie prove (1) identity of creditor/subscriber; (2) genuineness of transaction, namely, whether it has been transmitted through banking or other indisputable channels; (3) creditworthiness or financial strength of creditor/subscriber; (4) If relevant details of address or PAN identity of creditor/subscriber are furnished to Department along with copies of shareholders register, share application forms, share transfer register, etc., it would constitute acceptable proof or acceptable explanation by assessee; (5) Department would not be justified in drawing adverse inference only because creditor/subscriber fails or neglects to respond to its notices; (6) onus would not stand discharged if creditor/subscriber denies or repudiates transaction set up by assessee nor should Assessing Officer take such repudiation at face value and construe it, without more, against assessee; and (7) Assessing Officer is duty-bound to investigate creditworthiness of creditor/ subscriber genuineness of transaction and veracity of repudiation." Nova Promoters and Finlease (P) Ltd. (supra) after referring to dismissal of special leave petition against Divine Leasing case (supra) observed as under (page 197 of 342 ITR): "So understood, it will be seen that where complete particulars of share applicants such as their names and addresses, incometax file numbers, their creditworthiness, share application forms and share holders' register, share transfer register, etc., are furnished to Assessing Officer and Assessing Officer has not conducted any enquiry into same or has no material in his possession to show that those particulars are false and cannot be acted upon, then no addition can be made in hands of company under section 68 and remedy open to Revenue is to go after share applicants in accordance with law. We are afraid that we cannot apply ratio to case, such as present one, where Assessing Officer is in possession of material that discredits and impeaches particulars furnished by assessee and also establishes link between selfconfessed'accommodation entry providers', whose business it is to help assessees bring into their books of account their unaccounted monies through medium of share subscription, and assessee. ratio is inapplicable to case, again such as present one, where involvement of assessee in such modus operandi is clearly indicated by valid material made available to Assessing Officer as result of investigations carried out by Revenue authorities into activities of such'entry providers'. existence with Assessing Officer of material showing that share subscriptions were collected as part of pre-meditated plan-a smokescreen-conceived and executed with connivance or involvement of assessee excludes applicability of ratio. In our understanding, ratio is attracted to case where it is simple question of whether assessee has discharged burden placed upon him under section 68 to prove and establish identity and creditworthiness of share applicant and genuineness of transaction. In such case, Assessing Officer cannot sit back with folded hands till assessee exhausts all evidence or material in his possession and then come forward to merely reject same, without carrying out any verification or enquiry into material placed before him. case before us does not fall under this category and it would be travesty of truth and justice to express view to contrary." Lovely Exports Pvt. Ltd. (supra) was also considered and distinguished in NR Portfolio Pvt. Ltd. (supra) and it was held that entire evidence available on record has to be considered, after relying upon CIT v. Nipun Builders and Developers [2013] 350 ITR 407 (Delhi), wherein it has been held that reasonable approach has to be adopted and whether initial onus stands discharged would depend upon facts and circumstances of each case. In case of private limited companies, generally persons known to directors or shareholders, directly or indirectly, buy or subscribe to shares. Upon receipt of money, share subscribers do not lose touch and become incommunicado. Call money, dividends, warrants, etc., have to be sent and relationship remains continuing one. Therefore, assessee cannot simply furnish some details and remain quiet when summons issued to shareholders remain unserved and uncomplied. As general proposition, it would be improper to universally hold that assessee cannot plead that they had received money but could do nothing more and it was for Assessing Officer to enforce shareholders' attendance in spite of fact that shareholders were missing and not available. Their reluctance and hiding may reflect on genuineness of transaction and creditworthiness of creditor. It would be also incorrect to universally state that Inspector must be sent to verify shareholders/subscribers at available addresses though this might be required in some cases. Similarly, it would be incorrect to state that Assessing Officer should ascertain and get addresses from Registrar of Companies' website or search for addresses of shareholders themselves. Creditworthiness is not proved by showing issue and receipt of cheque or by furnishing copy of statement of bank account, when circumstances requires that there should be some more evidence of positive nature to show that subscribers had made genuine investment or had, acted as angel investors after due diligence or for personal reasons. final conclusion must be pragmatic and practical, which takes into account holistic view of entire evidence including difficulties, which assessee may face to unimpeachably establish creditworthiness of shareholders. In NR Portfolio Pvt. Ltd. (supra), it has been held as under (pages 78 and 86 of 2 ITR-OL): "In remand report, Assessing Officer referred to provisions of section 68 of Act and their applicability. word 'identity' as defined, it was observed meant condition or fact of person or thing being that specified unique person or thing. identification of person would include place of work, staff, fact that it was actually carrying on business and recognition of said company in eyes of public. Merely producing PAN or assessment particulars did not establish identity of person. actual and true identity of person or company was business undertaken by them. This, according to us, is correct and true legal position, as identity, creditworthiness and genuineness have to be established. PANs are allotted on basis of applications without actual de facto verification of identity or ascertaining active nature of business activity. PAN is number which is allotted and helps Revenue keep track of transactions. PAN is relevant but cannot be blindly and without considering surrounding circumstances treated as sufficient to discharge onus, even when payment is through bank account. On question of creditworthiness and genuineness, it was highlighted that money no doubt was received through banking channels but did not reflect actual genuine business activity. share subscribers did not have their own profit making apparatus and were not involved in business activity. They merely rotated money, which was coming through bank accounts, which means deposits by way of cash and issue of cheques. bank accounts, therefore, did not reflect their creditworthiness or even genuineness of transaction. beneficiaries, including respondent-assessee, did not give any share dividend or interest to said entry operators/subscribers. profit motive normal in case of investment, was entirely absent. In present case, no profit or dividend was declared on shares. Any person, who would invest money or give loan would certainly seek return or income as consideration. These facts are not adverted to and as noticed below are true and correct. They are undoubtedly relevant and material facts for ascertaining creditworthiness and genuineness of transactions... What we perceive and regard as correct position of law is that court or Tribunal should be convinced about identity, creditworthiness and genuineness of transaction. onus to prove three factum is on assessee as facts are within assessee's knowledge. Mere production of incorporation details, PANs or fact that third persons or company had filed income-tax details in case of private limited company may not be sufficient when surrounding and attending facts predicate cover up. These facts indicate and reflect proper paper work or documentation but genuineness, creditworthiness, identity are deeper and obtrusive. Companies no doubt are artificial or juristic persons but they are soulless and are dependent upon individuals behind them who run and manage said companies. It is persons behind company who take decisions, controls and manage them." Now, when we go to order of Tribunal in present case, we notice that Tribunal has merely reproduced order of Commissioner of Income-tax (Appeals) and upheld deletion of addition. In fact, they substantially relied upon and quoted decision of its co-ordinate Bench in case of MAF Academy P. Ltd., decision which has been overturned by Delhi High Court, vide its judgment in CIT v. MAF Academy P. Ltd. [2014] 206 DLT 277; [2014] 361 ITR 258 (Delhi)). In impugned order it is accepted that assessee was unable to produce directors and principal officers of six shareholder companies and also fact that as per information and details collected by Assessing Officer from concerned bank, Assessing Officer has observed that there were genuine concerns about identity, creditworthiness of shareholders as well as genuineness of transactions. In view of aforesaid discussion, we feel that matter requires order of remit to Tribunal for fresh adjudication keeping in view aforesaid case law. question of law is, therefore, answered in favour of Revenue and against respondent-assessee but with order of remit to Tribunal to decide whole issue afresh. One of reasons, why we have remitted matter is that cross objections of respondent-assessee questioning notice under section 147/148 were dismissed as infructous and even if we decide issue on merits in favour of Revenue, cross-objections would got revived and require adjudication. appeal is accordingly disposed of. *** Commissioner of Income-tax v. Navodaya Castles Pvt. Ltd