Law:

Section:

Section 2(14)(ii) of the income-tax act, 1961-Capital assets-Personal effects-Assesses sold 845 items of silver articles and vessels, which comprised more than one unit of same type of articles, and claimed all of them as personal effects-Whether it was open to revenue to investigate whether articles were required for personal use of assessee or whether articles were in excess of requirement for such personal use-Held, yes-Whether such apportionment between personal and non-personal use made in instant case was reasonable -Held, on facts, yes. Facts The assessee-HUF sold 845 items of silver articles and utensils and claimed that the profits on sale were exempt from capital gains tax because the articles sold were kept for its personal use. The ITO noticed that the articles sold comprised more than one unit of the same type of articles, and after allowing a reasonable portion of each article towards personal use, held that the remainder could not be treated as held by the assessee for personal use. Accordingly, he brought the capital gains which accrued on such portion to tax. The Commissioner (Appeals) and the Tribunal upheld the ITO's order. On reference, the assessee also contended that once it was claimed that it had kept an article for personal use, it should straightaway be accepted by the revenue. Held In the case of H.H. Maharaja Rana Hemant Singhji v. CIT [1976] 103 ITR 61 , the Supreme Court had held that it was only those articles commonly or ordinarily intended for personal or household use which would qualify as personal effects and that an intimate connection between the effects and the person of the assessee must be shown to exist to render them personal effects. Applying this test to the instant case, admittedly, the various items of silver articles sold would fall within the definition of capital asset, though they would stand excluded if it was found that the articles had been kept by the assessee for personal use. The silver articles sold by the assessee during the year in question were 845 items and it was not possible to treat all these items as having been kept by the assessee for personal use. It was for this reason that the assessing…

Deprecated: trim(): Passing null to parameter #1 ($string) of type string is deprecated in /home/digixyei/sldsystempk.com/view/master-layout/view_case.php on line 492