Personal effects exclusion denied for gold and silver treasure items used in puja; capital gains tax applied.

Gold sovereigns, silver coins and silver bars were not personal effects within the statutory exclusion because that term applies only to movable property held and used for personal purposes with an intimate personal connection to the possessor. Occasional use in puja, ceremonial placement before a deity, or retention as a treasured collection did not make the articles personal effects. They were therefore capital assets and the resulting transfer attracted capital gains tax under the relevant provisions.

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Issues: Whether the gold sovereigns, silver coins and silver bars sold by the assessee were personal effects excluded from the definition of capital asset under section 2(4A) of the Indian Income-tax Act, 1922, and therefore not chargeable to capital gains tax under section 12B of the Indian Income-tax Act, 1922.

Analysis: The statutory exclusion for personal effects applies only to movable property held for personal use, meaning property having an intimate personal connection with the possessor and used in a personal nature. The articles sold were treasure items and their occasional use in puja did not amount to personal use. Mere ceremonial placement before a deity or keeping a collection for satisfaction or pleasure does not bring such property within the expression personal effects.

Conclusion: The assets were capital assets and were chargeable to capital gains tax.

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