1979 (7) TMI 155

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....est on the debit balance of Shri A. K. Ramachandran or Shri A.R. Srinivasan. In these circumstances the ITO held that the interest chargeable or debit balances of the above persons should be treated as perquisites in their hands under s. 17(2) of the IT Act 1961 for the years under appeal. In this view of the matter the ITO brought to tax a sum of Rs. 56,000 in the case of Shri A.R. Srinivasan L/R of late Shri A.K. Ramachandran, Rs. 54,121 and Rs. 1,15,428 in the assessments of Shri A.R. Srinivasan for the asst. yrs. 1973-74 and 1974-75 respectively. It was argued before the AAC that there was no concept of perquisite in the above transaction and that further that even assuming that there was some perquisite, the quantum of perquisite adopt....

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....taken into account there will be no element of benefit constituting perquisite under s. 17(2)(iii) of the Act even by invoking the aid of the Madras High Court decision in 100 ITR 629. On behalf of the Revenue the learned departmental representative submitted that the plea about the detrimental material in the shape of offering of personal security and collateral security by the assessees was not raised before the ITO and that the same was raised for the first time before the AAC. The learned departmental representative therefore urged that an opportunity should be provided to the ITO to test the correctness of the plea raised by the assessee before the AAC. 4. We have considered the rival submissions. The plea of the assessee that the int....