In response to notice u/s. 131(IA) investor companies have filed copy of Balance sheets, copy of ITR Ledger account etc and confirmed that the investment made by them in the share capotal of asseee company.  AO made the addition u/s 68 of the Act. Before the CIT(A)  the asseee demanded for cross examination of parties  whose statements  were relied by the AO. In the appellate prceedings the parties denied that they have provided any accommodation entries to the assessee company or directors. CIT(A) deleted the addition, which was affirmed by the Appellate Tribunal. On appeal by the revenue dismissing the appeal the Court held that, the AO cannot question the transaction merely because he thinks the investor could have managed by paying a lesser amount as share premium. It is the prerogative of the Board of Directors to decide the premium and it is the wisdom of the shareholder whether they want to subscribe to shares at such a premium or not. S. 68 does not apply as the funds were received through banking channels and the identity, creditworthiness and genuineness of the investors was established. Estimated commission and addition made u/s. 69C of the Act was also deleted. (AY.2012-13)