1980 (4) TMI 207 - AT - Income Tax

Summary

Issues:
- Appeal and cross objection against the order of AAC regarding capital gains from silver utensils for the assessment year 1976-77.

Analysis:
1. The appeal and cross objection were filed against the AAC's order related to capital gains from silver utensils. The ITO calculated long-term capital gains on the sale of silver utensils by the assessee, considering only a part of the disclosed silver utensils. The assessee claimed the silver utensils were exempt as they were meant for domestic use.

2. The AAC partially allowed the appeal, stating that silver utensils weighing 10 kgs. could be characterized for domestic purposes. The Department filed an appeal against this decision, arguing that the entire 25 kgs. of silver utensils should be considered for capital gains. On the other hand, the assessee filed a cross objection, contending that the entire 25 kgs. were meant for domestic use and should not be subject to capital gains tax.

3. The Tribunal considered evidence presented by both parties. The assessee provided a certificate from the CIT stating that the silver utensils were intended for personal and domestic use. The departmental representative argued that the CIT did not verify this claim. However, the Tribunal noted that the assessee consistently claimed the silver utensils were for domestic use, supported by a sales receipt and a previous Tribunal order.

4. The Tribunal referred to previous cases to determine whether silver utensils could be considered for domestic purposes. It was established that the status of the assessee and customary practices were crucial in determining the use of silver utensils for domestic purposes. Considering the evidence and precedents, the Tribunal held that the entire 25 kgs. of silver utensils were meant for domestic use and, therefore, exempt from capital gains tax.

5. Consequently, the departmental appeal was dismissed, and the cross objection was partially allowed. The Tribunal's decision was based on the interpretation of the IT Act and established principles regarding the use of silver utensils for domestic purposes, ultimately exempting the silver utensils from capital gains tax.