Law:

Section:

I. Section 168 of the Income-tax Act, 1961 - Executors - Whether assessment made on assessee under section 168 was justified - Held, yes Section 4 of the Income-tax Act, 1961 - Income - Chargeable as - Whether both instalment of principle amount and interest on annuity deposit were taxable - Held, yes - Whether proportionate estate duty payable on annuity deposit was not deductible from annuity deposit assessable as income - Held, yes HELD-I Following the decision in Jayakumari and Dilharkumari v. CIT (1987) 165 ITR 791 (Kar.), it was to be held that the Tribunal was justified in upholding assessment made on assessees under section 168. The Tribunal was justified in holding that both instalment of principal amount and interest on annuity deposit were taxable and also that the proportionate estate duty payable on annuity deposit was not deductible from annuity deposit assessable as income. II. Section 45 of the Income-tax Act, 1961 - Capital gains - Chargeable as - Assessment year 1973-74 - Jewellery was included in definition of 'Capital asset' from 1-4-1973 - Assessee sold jewellery on 8-8-1972 - Whether capital gains arose out of sale of jewellery in assessment year in question- Held, yes FACTS The assessee had sold certain jewellery on 8-8-1972. By the Finance Act, 1972, which was brought into force with effect from 1-4-1973, gold ornaments and jewellery were included in the definition of "Capital asset". The assessees contended that there was no capital gains during the assessment year in question, since the sale had taken place during the accounting year and not in the assessment year. All the authorities including the Tribunal rejected that claim. On reference: HELD Following the decision of the Gujarat High Court in Meneklal Vallabhdas Parikh's case [1969] 72 ITR 637 , it was to be held in the instant case that the Tribunal was right in confirming the assessment of capital gains arising out of the sale of the jewellery in the assessment year in question. The Tribunal was also right in taking the cost of jewellery for the purpose of computation of capital gains as on 1-1-1954, and not as on 1-4-1973, the date on which they were declared to be capital…

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