Section 40(a)(ia) and 263 of the Income Tax Act, 1961 — Revision — The jurisdictional Court has held that tax was required to be deducted only on the amounts payable and the assessee was not required to deduct tax on the amounts paid during the year, since the assessee had followed Mercantile system of accounting. the entries of interest credited by him to the payees accounts were entries of Accrual in the absence of cash transactions, which amounted to payment and therefore,  the AO had rightly not made disallowance according to the judgment of the jurisdictional Court and in terms of the Board's Circular which was binding on him. hence, order passed by the AO was neither erroneous nor prejudicial to the interests of revenue as the AO had rightly not made the disallowance and the order passed by the Commissioner under section 263 was to be quashed— Ravindra Khemka vs. Principal Commissioner of income tax [2019] 76 ITR (trib) 330 (Lucknow)