1988 (12) TMI 32

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.... on the facts and in the circumstances of the case, the surplus on the sale of silver utensils is liable to capital gains tax ?" The facts relating to this question are stated as follows : The assessee made a disclosure under section 3(1) of the Voluntary Disclosure of Income and Wealth Ordinance, 1975, and one of the items included therein was silver utensils weighing 200 kgs. valued at Rs. 8,000. Out of the said 200 kgs. the assessee claimed to have sold 49.521 kgs. of silver utensils for a total consideration of Rs. 54,859 and credited the said amount in his books of account during January-April, 1976. On the sale of the silver utensils of 49.521 kgs., the assessee claimed to have made a profit of Rs. 52,879 (Rs. 54,859 minus cost ....

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.... assets in the hands of the assessee. Another point which lent support to the Income-tax Officer to arrive at his view is the fact that the assessee had also disclosed that he purchased stainless steel utensils weighing 150 kgs. during the accounting year relevant to the assessment year 1961. The Income-tax Officer, therefore, was of the opinion that man who had so many stainless steel utensils could not be supposed to use again silver utensils. Further, if the assessee was using silver utensils since 1931-32 as alleged, why should he purchase stainless steel utensils in 1961-62. Besides, if the assessee was so rich, why had he to disclose under the Voluntary Disclosure Scheme some water heaters purchased in 1974-75. The Income-tax Officer,....

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....hat the utensils consist of thalis, katoris, tumblers, etc. The Tribunal observed that the very use of the word "utensils" presupposes personal use. The Revenue has relied on the decision in the case of H. H. Maharaja Rana Hemant Singhji v. CIT [1976] 103 ITR 61, where the Supreme Court has held that (headnote) : "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 2(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." A simi....