TaxTMI 
TaxTMI 
2025 (8) TMI 976
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....eof was liable to be taxed under the head 'Capital Gains'? 2. Facts giving rise to filing of this Appeal, in a nutshell, are that the Assessee was an employee of M/s. Indu Nishan Oxo-Chemical Indusries Ltd. and was a salaried employee. The Assessee had income from house property, share income, dividend etc. The Assessee filed the return of income on 28 November 1992 for Assessment Year 1992-1993 declaring a total income of Rs. 2,79,440/-. In the course of assessment proceedings, the Assessee appeared personally and his statement was also recorded. The Assessing Officer noticed that the Assessee has purchased a vintage car namely "Ford Tourer" 1931 Model from one Mr. Jesraj Singh of Delhi sometime in the year 1983 for a consideration of Rs. 20,000/-. The said car was sold for a consideration of Rs.21,00,000/- to one Mrs. Kamalaben Babubhai Patel. On a query made by the Assessing Officer, the Assessee by a communication dated 28 January 1994, apprised the Assessing Officer that the car was shown as a personal asset in Wealth-tax and same was an exempt asset. The Assessing Officer by an order dated 8 March 1994, added the sum of Rs. 20,80,000/- as income to the Assessee on account ....
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....undra vs. Commisioner of Income-tax, (2000) 112 Taxman 253 (Calcutta), Commissioner of Income-tax vs. H.H. Maharani Usha Devi, (1998) 231 ITR 793 (SC), Himatlal C. Valia vs. Commissioner of Income-tax, (2001) 248 ITR 262 (Gujarat), Faiz Murtaza Ali vs. Commissioner of Income-tax, (2013) 31 taxmann.com 232 (Delhi), G.S. Poddar vs. Commissioner of Wealth-tax, (1965) 57 ITR 207 (Bombay), Commissioner of Wealth-tax vs. Smt. Arti Goenka, (1980) 3 Taxman 253 (Madras), Poonawalla Estate Stud & Agricultural Farm vs. Commissioner of Income-tax, (2025) 176 taxmann.com 308 (Bombay). 6. On the other hand, learned counsel for the Revenue has supported the order passed by the Tribunal and has submitted that the finding recorded by the Tribunal does not suffer from any infirmity warranting interference of this Court in exercise of powers under Section 260-A of the Income Tax Act, 1961. In support of his submissions, reliance has been placed on decision of the Supreme Court in H.H. Maharaja Rana Hemant Singhji vs. Commissioner of Income-Tax, Rajasthan, (1976) 103 ITR 61 SC. 7. We have considered the submissions made on both sides and have perused the record. Before proceeding further,....
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.... "personal effects". 8. The enumeration of articles like wearing apparel, jewellery, and furniture mentioned by way of illustration in the above quoted definition of "personal effects" also shows that the legislature intended only those articles to be included in the definition which were intimately and commonly used by the assessee. 12. In "Words and Phrases" (Permanent Edition), Volume 32 at p. 277 it is stated that the words "personal effects" when used without qualificak tion, 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. 13. 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" meant for personal use. Even the sovereigns and the silver coins which are alleged to have been customari....
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.... 10. Thus, from aforesaid enunciation of law it is evident that for treating a movable property as personal effects, an intimate connection between the effects and the person of the Assessee must be shown. In case before the Apex Court though the silver bars and silver coins were proved to be used for puja, the same was held to be not constituting personal use. It is also held that the expression 'intended for personal or household use' does not mean capable of being intended for personal or household use but it means normally or commonly intended for personal or household use. Thus capability of a car for personal use would not ipso facto lead to automatic presumption that every car would be personal effects for being excluded from capital assets of the Assessee. 11. Thus, before arriving at a finding with regard to personal effects, the evidence with regards to personal use is necessary. The Income Tax Appellate Tribunal in paragraph 23 as of its order dated 12 May 2003 has held as under: "23. After going through all the decisions, we find that the test which is to be applied for ascertaining, whether a particular asset is "personal effect", would be, whether the par....
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....only on the aspect of personal use of the car by the Assessee. It is pertinent to note that it is not the case of the Assessee that the finding of fact recorded by the CIT(A) is perverse. 13. Reliance on various judgments by the learned counsel for Assessee is inapposite in the facts and circumstances of the case. The whole case turns on peculiar facts of the case. In none of the judgments, requirement of personal use of the asset has been dispensed with. We briefly deal with the judgments cited on behalf of the Assessee: (i) In Commissioner of Income-tax vs. Smt. Sitadevi N. Poddar (supra) and Jayantilal A. Shah (supra) the issue before this Court was treatment of silver utensils as personal effects. This Court held that even if the utensils were not used daily but occasionally, the same would constitute personal use. In the present case even occasional use of the car is not proved. (ii) In Benarashilal Kataruka (supra) and Smt. Shree Kumari Mundra vs. Commissioner of Income-tax (supra) also the issue before Calcutta High Court was about silver utensils being used occasionally. (iii) The case before Gujarat High Court in Himatlal C. Valia vs. Commissi....