This appeal of the assessee arises from the order of learned CIT(A), Faridabad, vide order dated 22.07.2016 for the assessment year 2010-11. The assessee has raised the grounds of appeal as under:

1. That the order passed by Ld. CIT(A), Faridabad is bad in law and additions confirmed deserves to be deleted. 2.That the Ld. CIT(A), Faridabad was not justified in confirming additions of Rs. 604832/- u/s. 40(a)(ia) in total income for not deducting TDS from various payments.

3. That the Ld. CIT(A), Faridabad was not justified in confirming additions of Rs.950000/- in total income u/s.68 on account of unsecured loans taken from Smt. Madhu Garg and Shri Ankush Garg.

4. That the Ld. CIT(A), Faridabad was not justified in confirming disallowance of Rs. 12140/- in total income out of telephone expenses on account of personal use. 5That the Ld. CIT(A) , Faridabad was not justified in confirming disallowance of Rs. 23780/- in total income out of car expenses for personal use. 6.That the appellant seeks the leave of honorable ITAT to add, modify, amend or delete any grounds of appeal at the time of hearing or before it.

2. The assessee does not press grounds no.4 and 5, therefore, same are dismissed as not pressed. ITA No.4971/Del/2016 2

3. Grounds No.1 and 6 are general in nature, therefore, do not require any adjudication.

4. As regards Ground No.2, the brief facts of the case as are emanating from the order of the Assessing Officer are reproduced hereinbelow: During the assessment proceedings the counsel of assessee was asked to furnish the profit and loss accounts, audit report and all the details of expenses debited in the profit and loss account and the same were furnished by the counsel of the assessee. On perusal of the balance sheet it was noticed that assessee had raised secured loan from GE Capital, Laxmi Nagri Path Sansthan, Magma Leasing. The assessee had debited interest on this loan amounting to Rs.1,40,556/-, Rs.3,89,938/- and Rs.74,338/- totaling to Rs.6,04,832/-. But the assessee has not deducted tax at source on the payment of interest on loan made to abovesaid finance companies amounting to Rs.6,04,832/-, therefore, provisions of section 40(a)(ia) are applicable. As per provision of section 40(a)(ia) any interest on which tax is deductable at source under chapter XVII-B and such tax has not been deducted, such interest shall not be deducted in computing the income chargeable under the head profit and gain of the business. Vide order sheet entry dated 11.02.2013 the counsel of the assessee was asked to explain the purpose of the loan and weather any tax has been deducted on the payment of the interest made to the above said companies. The counsel of the assessee vide reply dated 18.02.2013 stated that no liability of tax arise in respect of payment of interest in case of above said finance companies. In case of Magma Leasing the counsel of assessee submitted that the payment made to Magma Leasing is less than RS.1,20,000/- so that no liability of TDS is arise as per section 194 I. the counsel of the assessee forget that TDS on interest has to be deduct u/s. 194 A and not u/s194 I and the assessee was liable to deduct tax on the payment of interest made to above said company. The assessee submitted Laxmi Nagri Path Sansthan is a corporation established under Maharashtra Government, therefore no liability of TDS arise in this case. LaxmiNagri Path Sansthan is a Co-operative Society registered under the Director Co-operative Society and not a bank, therefore, the assessee was liable to deduct TDS on the payment of interest made to this society. It is, therefore, clear that assessee has not deducted the tax at source on the payment of interest. The assessee has violated the provision of section 40(a)(ia) of the IT Act, 1961 by not deducting tax at source on the payment of interest made to above companies amounting to Rs.6,04,832/-. Therefore, interest debited amounting to Rs.6,04,832/- in the profit and loss account is disallowed and added in the income of the assessee. (Addition of Rs.6,04,832/-~

5. Learned CIT(A) confirmed the action of the Assessing Officer.

6. I have heard the rival contentions and perused the facts of the case. It is a matter of fact, in the present case interest has already been paid and no part is payable. Accordingly no disallowance can be made as per provision of Section 40(a)(ia) of the. The reliance is placed upon the decision of ITA No.4971/Del/2016 3 ITAT Visakhapatnam in the case of Merilyn Shipping & Transports vs. ACIT which is placed at pages 66 to 97 of the paper book. The relevant portion are reproduced hereinbelow:

The only word put in the provision of section 40(a)(ia) is payable and not paid or credited, rather Legislature consciously replaced the word amounts credited or paid with the word payable in the final enactment and such change was done with a purpose In the Finance bill both the words paid and payable were used. However, the word paid was subsequently, dropped which shows that section 40(a)(ia) was meant to be applicable only if the amounts covered therein was payable at the end of the year In the present case, section 40(a)(ia) creates a legal fiction for the amount outstanding or remains payable, i.e., at the end of every year as on 31st March and it cannot be extended for taxing the amounts already paid. In fact, section 201 itself takes care of tax to be collected in the hands of the payee and other TDS provisions under chapter XVII-B of the. No further legal fiction from elsewhere in the statute can be borrowed to extend the field of section 40(a)(ia). This fiction cannot be extended any further and, therefore, cannot be invoked by Assessing Officer to disallow the genuine and reasonable expenditure on the amounts of expenditure already paid. [Para 101 In view of the above discussion and in view of the provisions of section 40(a)(ia), on comparison between the proposed and enacted provision, the only conclusion which one can reach is that the legislature consciously replaced the words amounts credited or paid with the word payable in the final enactment. By changing the words from credited or paid to payable, the Legislative intent has been made clear that only outstanding amounts or the provisions for expenses liable for TDS under chapter XVII-B of the are sought to be disallowed in the event there is a default in following the obligations casted upon the assessee under Chapter XVII-B of the.

Also reliance is placed upon the decision of Honble High Court of Allahabad in the case of CIT Vs. Vector Shipping Services P. Ltd., copy of which is placed at pages 98 to 100 of the paper book and the relevant portion of the decision is reproduced hereinbelow:

10. it is to be noted that for disallowing expenses from business and profession on the ground that TDS has not been deducted, the amount should be payable and not which has been paid by the end of the year.

Further reliance is placed upon the decision of ITAT Delhi Bench B ITA No.4971/Del/2016 4 New Delhi in the case of Cadtrium Engineering Solutions (P) Ltd. vs. ITO, reported in (2013) 33 taxmann.com 269 (Del. Tri) and the relevant portion is reproduced hereinbelow: 12. We have heard the rival submissions and perused the material available on record. It is not disputed that the payments were made during the year and no amount was payable at the end of the financial year. This fact is not controverted by the Revenue. the Honble Special Bench in the case of Merilyn Shipping & Transports (supra) has held as under:

6 The provisions of s. 40(a)(ia) of the was introduced in order to ensure compliance of TDS but assigned the term payable in the provision of s. 40(a)(ia) of the. On a comparison between the proposed and enacted provision, the only conclusion, which can be reached, is that legislature consistently replaced the word amount credited or paid with the word payable in the final enactment and such change was not done without any purpose. It is a basic presumption that an enactment brought in by the legislature is well thought of and property worded in order to given meaning to its intent by changing the words from credited or paid to payable. The legislative intent has been made clear that only the outstanding amount or the provision for expense liable for TDS is sought to be disallowed in the event there is a default of TDS. Respectfully following the ratio laid in Merilyn Shipping & Transports (supra), this ground of the assessees appeal is allowed. The Assessing Officer is directed to delete the addition made on this basis.

Also reliance is placed upon the decision of Honble High Court of Punjab & Haryana in the case of CIT vs. Rajinder Parshad Jain, reported in (2015) 61 taxmann. com 310 (P&H) and relevant portion is reproduced at page 110 of the paper book.

Following the abovesaid parity of reasoning, we direct the Assessing Officer to verify the stand of the assessee and in case the said amounts have been paid by the assessee during the year under consideration, no disallowance is warranted out of the said payments in line with the provisions of section 40(a)(ia) of the.

7. In the circumstances and facts of the case, the Assessing Officer cannot make any disallowance and disallowance so made is directed to be deleted. Accordingly, the grounds no.2 and 3 is allowed.

8. As regards ground no.3, the brief facts of the case are that during the course of assessment proceedings it was noticed that assessee has raised unsecured loan from Smt. Madhu Garg & Shri Ankush Garg amounting to ITA No.4971/Del/2016 5 Rs.5,00,000/- and Rs.4,50,000/- respectively. The Assessing Officer has verified bank account of Smt. Madhu Garg & Shri Ankush Garg amounting to Rs.5,00,000/- and Rs.4,50,000/- respectively. The Assessing Officer has verified bank account of Smt. Madhu Garg maintained with axis bank where she has deposited cash Rs.2,50,000/- on 15.03.2010 and issued cheque of Rs.2,50,000/- to the assessee. Similarly on 17.03.2010, she deposited cash of Rs.2,50,000/- and issued cheque of the same amount on 18.03.2013 to the assessee, which have been credited in the assessees bank account maintained with HDFC Bank. As per statement of Smt. Madhu Garg she was asked to explain the source of cash deposit of Rs.2,50,000/- each on

15.03.2010 and 17.03.2010, she stated that this is out of her truck income and capital. When she was asked how much income she earned from plying trucks, she stated that from each truck she earned Rs.3 to 4 thousand per month after meeting all expenses on trucks.

9. As per bank account statement maintained with Axis Bank, Sh. Ankush Garg deposited cash Rs.4,50,000/- on 30.03.2010 and issued the cheque of Rs. 4,50,000/- to the assessee on the same day which have been credited in the assessees bank account maintained with Corporation Bank. The counsel of the assessee produced Shri Ankush Garg on 27.02.2013 and his statement was recorded. In his statement he deposed that he is an income tax assessee having PAN: ALGPG5795H and he is filling his income tax return in ward-1(3), Faridabad. He earned income from plying trucks and he has four trucks in his name. He also stated that he has given a loon of Rs.4,50,000/- to Sh. Raieev Garg, who is his uncle. When he was asked to explain the source of cash deposit of Rs.4,50,000/- on 30.03.2010, he stated that this is out of his truck income and capital. When he was asked how much income he earned from plying truck, he stated from each truck he ITA No.4971/Del/2016 6 earned Rs.3 to 4 thousand per month after meeting all expenses on trucks.

10. Since the assessee could not explain the source of such deposit of cash to the satisfaction of the Assessing Officer. Accordingly he added the same to the income of the assessee.

11. Before the learned CIT(A), the assessee submitted certain additional documents which were sent to the Assessing Officer for remand report and after receiving remand report and rejoinder the learned CIT(A) confirmed the action of the Assessing Officer.

12. I have heard the rival contentions and perused the facts of the case. The assessee has received unsecured of Rs.5 lac from Smt. Madhu Garg cash and Rs.4,50,000/- who has deposited cash in their bank account and immediately issued the cheques to the assessee. The immediate source of income by Smt. Madhu Garg and Shri Ankush Garg was stated to be income which was not sufficient enough to believe a capital of Rs.5 lac and Rs.4,50,000/- was available with them and no documentary evidence was placed on record to substantiate the claim that so much of amount was available with the said persons. In such circumstances and facts of the case the amount remains unverified and unsubstantiated and accordingly, I find no infirmity in the order of learned CIT(A) who has rightly confirmed the action of the Assessing Officer. Thus, Ground No.3 is dismissed.

13. In the result, the appeal of the assessee is partly allowed. Order pronounced in the open court on this day 28 th April, 2017 Sd/- (B.P. JAIN) ACCOUNTANT MEMBER Dated: 28/04/2017