1985 (8) TMI 117

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....e facts in that regard are that the assessee received earnest moneys which remained with it till the sales were completed. In this way, according to the ITO, the assessee was having surplus funds with it on which interest would have been earned by it at the rate of 12 per cent. Since the assessee did not show the full amount of interest which would have been earned by it on such surplus funds, the ITO made additions, relying upon section 28(iv) of the Income-tax Act, 1961 ('the Act'). The position would be clear from the following table: ---------------------------------------------------------------------------------------------------------------------------------------------------      Assessment year  ....

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....sp;                                        Rs.                        Rs.                     Rs.                   Rs.      1969-70               &nbsp....

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....;            84,000              14,737               69,263 3. In appeal, the learned AAC held that until and unless the department could establish that the money remained engaged profitably somewhere to fetch some return, to the assessee-firm, nothing could be included in the total income in the form of 'deemed interest'. He held that the provisions of section 28(iv) were not attracted. 4. In the appeals before us, both parties pointed out that the provisions of section 28(iv), dealing with benefit or perquisite, were not attracted. After hearing....