Law: Income Tax Act, 1922

Section: 2,2(4A),12B

[Indian Income Tax Act, 1922 (Xl of 1922)]........Section 2 (4A), 12B-Capital gains»-Capital asset-Silver bars, soverigns and rupee coin us-Used for purposes of puja, festivals and rituals- Whether personal effects-Held no-Capital gains from sale of such articles-Whether liable to tax-Held yes-"Personal effects", meaning of An intimate connection between the effects and the person of the assessee must be shown to exist to render them "personal effects" within the meaning of that expression used in clause (ii) of the exceptions in Section: (4A) of the Indian Income Tax Act, 1922. The legislature intended only those articles to be included within the expression "personal effects" which were intimately and commonly used by the assessee. Held, accordingly, that the assessee was liable to tax on the capital gains derived by the sale of sovereigns, silver bars and rupee coin ns, under Section 12B of the Indian Income Tax Act, 192 , read with Section 2(4A). The silver bars or bullion could by no stretch of imagination he deemed to be "effects" meant for personal use. Nor could the sovereigns and silver coin ns by their use on special occasions of worship of Maha Lakshmi be designated as effects meant for personal use. Case approved : G. S. Poddar v. CWT [1965] 57 LTR 207 (Bom). Case affirmed : H. H. Maharaja Rana Hemant Singhji v. CIT [1970] 77 ITR 1007 affirmed. Cases referred to CWT v. Arundhati Balkrishna (1970) 77 ITR 505 (SC) James Anderson v. CIT (1960) 39 ITR 123 (SC). Appeal by special leave from the and order dated December 2, 1969, of the Rajasthan High Court in I. T. R. No, 5 of 1966. The decision of the High Court is reported as H. H. Maharaja Rana Hemant. JUDGMENT (The judgment of the court was delivered by JASWANT SINGH J)-This appeal by special leave is directed against the judgment dated December 2, 1969, of the High Court of Rajasthan. Briefly stated the facts giving rise to this appeal are Maharaja Shri Udebhan Singhji of Dholpur died issuless on October 22, 1954. On the day following his demise all the movable valuables possessed by him were taken over and sealed by the Government of Rajasthan because of the dispute regarding succession to the…

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