AI Drafter 
TaxTMI 
TaxTMI 
TaxTMI 
1976 (2) TMI 1
X X X X Extracts X X X X
X X X X Extracts X X X X
....d by the Government of Rajasthan because of the dispute regarding succession to the gaddi. On December 13, 1956, Maharaja Shri Hemant Singhji, the appellant herein, who was then a minor, was recognised by the Government of India as successor of the former Maharaja and the aforesaid assets which, inter alia, consisted of 4,825 gold sovereigns, 7,90,440 old silver rupee coins and silver bars weighing 2,54,174 tolas were released by the Rajasthan Government and handed over to Rajmata in her capacity as the adoptive mother and guardian of the appellant on March 24, 1957. During the financial year 1957-58, the aforesaid sovereigns, silver coins and silver bars were sold at the suggestion of the Government of India for a net consideration of Rs. ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....eferred the following question of law at the instance of the appellant to the High Court of Rajasthan at Jodhpur under section 66(1) of the Act : " Whether, on the facts and in the circumstances of the case, the assets sold were capital assets within the meaning of section 2(4A) chargeable to capital gains tax under section 12B of the Indian Income-tax Act, 1922. " By its order dated December 2, 1969, the High Court answered the question in the affirmative holding that in order that an article should constitute a part of personal effects, it is necessary that the article must be associated with the person of the possessor and that the aforesaid items consisting of gold sovereigns, silver rupees and silver bars could not be deemed to f....
X X X X Extracts X X X X
X X X X Extracts X X X X
....eant for the personal use of the assessee. We have given our earnest consideration to the submissions of learned counsel for the parties. For a proper decision of the point in question, it is necessary to refer to section 2(4A) of the Act, the relevant portion whereof runs thus : " 2(4A) 'Capital asset' means property of any kind held by, an assessee, whether or not connected with his business, profession or vocation, but does not include-- ...... (ii) personal effects, that is to say, movable property (including wearing apparel, jewellery and furniture) held for personal use by the assessee or any member of his family dependent on him ; " The expression "personal use" occurring, in clause (ii) of the above quoted provision is v....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ut the person. In "Words and Phrases" (permanent edition), volume 32, at page 277, it is stated that the words "personal effects" when used without qualification, generally include such tangible property as is worn or carried about the person, or to designate articles associated with the person. At another place at the same page, it is stated that the words "personal effects" are used to designate articles associated with person, as property having more or less intimate relation to person of possessor or such tangible property as attends the person. Bearing in mind the aforesaid meaning assigned to the expression in various dictionaries and cases, the silver bars or bullion can by no stretch of imagination be deemed to be "effects" me....
X X X X Extracts X X X X
X X X X Extracts X X X X
....in the year 1945 as a Justice of the Peace was presented with two gold caskets, a gold tray, two gold glasses, a gold cup, saucer and spoons, and photo frames as souvenirs by the dealers and brokers in cloth with whose business he was connected and he kept these articles in a glass show case for display in his drawing room and in assessment year 1959-60, claimed exemption in respect of these articles under the above-quoted provision, i.e., under section 5(1)(viii) of the Wealth-tax Act, 1957, it was held that merely because the gold caskets were kept in the show case did not make them part of the furniture and the rest of the articles could not be considered to be household utensils as that expression did not embrace within its sweep gold a....