TMI Blog1979 (7) TMI 155X X X X Extracts X X X X X X X X Extracts X X X X ..... andran 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 adopted by the ITO was not correct. The AAC reject ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 interest chargeable on the debit balance shoul ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in evaluating the benefit which the assessees derived in respect of non-charging of interest on their debit balances. We are unable to agree with the reasonings of the AAC that the assessees as directors of the company are interested in seeing that the company was financially well off and therefore there was no detriment. There is no legal obligation on the part of the Directors to give personal security and also securities of their family properties for the loans raised by the company. In the absence of such a legal obligation the personal security etc., offered by the Directors are undoubtedly detrimental to their personal interests and therefore in determining the quantum of perquisite assessable under s. 17(2)(iii) of the Act, the detr ..... X X X X Extracts X X X X X X X X Extracts X X X X
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