9911796707
TMI Blog1988 (6) TMI 89X X X X Extracts X X X X X X X X Extracts X X X X ..... by the assessee's to the trustees of L&T Educational and Welfare Trust, Bombay, on 22nd Mar., 1982 for a total consideration of Rs. 11 lakhs. The share of each assessee- HUF comes to Rs. 3,66,667. Out of this, a consideration of Rs. l lakh was received by these assessees towards the sale price of the items of furniture, cutlary, potted, plants etc. The assessees in their income tax returns for the asst. yr. 1982-83 claimed exemption of the sale price of these movable assets from capital gains-tax on the that they are the "personal effects" of the assessee HUF and are, therefore, not capital assets within the meaning of s. 2(14) of the IT Act. The ITO rejected this claim of the assessee and subjected this amount to capital gains-tax. The re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r s. 2(14)of the Act. It is further submitted that the Madhya Pradesh High Court judgment in Shri Gopal Rameshwardass's case which, was relied on by the commissioner deals, with the interpretation of the provisions contained in s. 54 of the Act whereas the assessee's case concerns with the interpretation of s. 2(14)(ii) of the Act. In support of the fact that the HUF can have personal effects as contemplated in s. 1(14)(ii) of the Act, the assessee's counsel has placed reliance on the decision of the Madras High Court in the case of Ramanathan Chettiar, R. vs. CIT reported in (1985) 152 ITR 493 (Mad). In view of the above, it is submitted that the order of the Commissioner(A) holding that the movable properties of the assessee are not their ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... "personal effects" contemplated in s. 2(14)(ii) of the IT Act. 5. In Shri Gopal Rameshwardass's case, the Madhya Pradesh High Court while interpreting the provisions of s. 54 of the Act, has taken the view that the word "assessee " should normally refer to living parsons and not to an artificial juridical person or a frictional person. While so doing it denied the benefit or exemption to the assessee HUF under s.54since it is not a living person. The same view was affirmed by the Madhya Pradesh High Court in kaniahlal's case cited. Similar is the view expressed by the Karnataka High Court in the case of C. Chandrasekhar while dealing with the scope of s.54of the Act. However, we may state that the language used in (s). 54 is not Pari mate ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ndu Law (15th Ed. At page 314, while dealing with the rights of coparceners, has stated that no coparcener is entitled to any special interest in the coparcener property nor is he entitled to exclusive possession of any part of the property. It is further stated that each coparcener is entitled to joint possession of any part of the property. It si further stated that each coparcener is entitled to joint possession and enjoyment of the family property and if any coparcener is excluded from joint possession or enjoyment, he is entitled to enforce his right by a suit. In view of the above, it is clear that all the members of an HUF are entitled to the joint possession and enjoyment of the movable property and no coparcener could say that the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ee with regard to the personal to the assessee with regard to the personal effects while computing the assessee's capital asset. One of the fundamental cannon of construction of Statutes is that an interpretation which would further the object rather than that which defeats it shall be preferred. Here, the assessee is an HUF which is a group of individuals. Sec. 2(14)(ii) provides that personal effects of the assessee are to be excluded while computing the capital assets of the assessee. If the interpretation as advanced by the Revenue, namely, that the assessee means an individual and does not include an HUF which is nothing but a group of individuals is accepted, it would defeat the object of s. 2(14)(ii). Apart from that, the Madras High ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... use, the High Court came to the conclusion that all these Silver articles cannot, therefore, be treated as the 'personal effects' of the assessee within the meaning of s. 2(14)(ii) of the Act. 9. From the above decision, it is seen that though the Madras High Court has dismissed the Reference Application of the assessee, the High Court has clearly recognised the position that an HUF can have personal effects. Following the decision of the Madras High Court we are inclined to take the view that the assessee HUF can also have personal effects as contemplated in s. 2(14)(ii) of the Act. 10. The next point that arises; is whether all the items shown in the lists appended to the Paper Book Constitute the personal effects of the assessee. Accor ..... X X X X Extracts X X X X X X X X Extracts X X X X
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