1984 (1) TMI 23

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.... and for the assessment year in question, it filed a return of income admitting a total income of Rs. 1,36,652. The ITO completed the assessment and computed the total income at Rs. 1,70,117. The ITO found that the assessee had sold 845 items of silver articles and vessels for Rs. 2,59,894, and that the assessee was in receipt of capital gains by such sale. The contention of the assessee that the profits on sale of silver articles were exempt from capital gains tax because the articles sold were for the personal use of the assessee and hence were not capital assets as defined in s. 2(14) of the I.T. Act, 1961, was not accepted by the ITO. Aggrieved by the order of the ITO, the assessee preferred an appeal before the Commissioner of Income-t....

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....to their number, should be taken to have been kept by the assessee for personal use. Thus, according to the learned counsel for the assessee, whenever the assessee says that it has kept an article for personal use, it should straightaway be accepted by the Revenue. We are not inclined to agree with the said submissions of the learned counsel for the assessee. Irrespective of the claim put forward by the assessee that he is having articles for personal use, the Revenue has to investigate whether the articles are required for the personal use of the assessee as claimed by the assessee or whether the articles are in excess of the requirement of the personal use of the assessee so that it will fall within the definition of capital assets in s. ....

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....asonably be held to have been kept by the assessee for personal use. The allocation of the articles for personal use in this case by the ITO appears to be quite reasonable and this is also the view taken by the Tribunal. In fact, we find that the Supreme Court while interpreting the provisions of s. 2(4A)(ii) of the Indian I.T. Act, 1922, which corresponds to s. 2(14)(ii) of the present Act, in Maharaja Rana Hemant Singhji v. CIT [1976] 103 ITR 61 (SC) held that it was only those articles commonly and ordinarily intended for personal or household use which would qualify as personal effects. In that case, the Supreme Court was of the view that a close scrutiny of the context in which the expression do personal use " occurs shows that only th....