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TMI Blog1996 (8) TMI 162X X X X Extracts X X X X X X X X Extracts X X X X ..... ers for income-tax as well as wealth-tax. 3. For the assessment year 1987-88, both these assessees before us had sold the silver utensils of domestic and personal use and claimed it as exempt under the provisions of the Income-tax Act. The assessees had pleaded before the Assessing Officer that the gains on the sale of silver utensils of domestic and personal use was not liable to be assessed under section 45 of the Income-tax Act. 4. The Assessing Officer examined the issue with reference to the assessability of the gains under section 45 of the Income-tax Act. On examination of the facts, the Assessing Officer held "in the present case though there is a transfer of the silver utensils, but they are personal assets and therefore, cannot said to be capital assets. The profit on sale of silver utensils is, therefore, exempt from capital gains". In this regard, the Assessing Officer relied on the following authorities : (1) Jhabarmal Balaram Poddor, HUF v. 10th ITO [IT Appeal No. 2593 (Bom.) of 1975-76], (2) ITO v. Brij Mohan Bagaria [IT Appeal No. 140 (Pat.) of 1980], (3) IT Appeal No. 1207 (Bom.) of 1981 (Bombay Bench), (4) IT Appeal No. 1578 (Jp) of 1979 (Jaipur Bench) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or not connected with the business or profession, but it does not include the personal effects. The silver utensils for the domestic and personal use were the personal effects of the assessees and, therefore, do not come within the purview of an asset for the purpose of liability to tax under section 45 of the Income-tax Act. In this connection, the learned counsel has drawn our attention to the following decisions : (1) Jayantilal A. Shah v. K. N. Anantharam Aiyar, CIT [1985] 156 ITR 448/23 Taxman 14 (Bom.), in which it is held that gains resulting from the sale of silver utensils were not assessable to tax as capital gains. (2) CIT v. Sitadevi N. Poddar [1984] 148 ITR 506/17 Taxman 345 (Bom.). According to the learned counsel, this decision also supports the same view. The Assessing Officer, in the opinion of the learned counsel, was, therefore, legally right in holding that the sale proceeds of silver utensils for domestic and personal use was not liable to tax under section 45 of the Income-tax Act. 8. The learned counsel also pleaded that the Assessing Officer had completed the assessment in accordance with law. His assessment order was justified on facts and in law. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Commissioner gave up the said stand, and instead, held that the gain on the sale of silver utensils for domestic and personal use was assessable under section 56 as income from other sources. While issuing the notice of hearing, the Commissioner did not take the stand that the income was to be assessed under section 56 of the Act. The Commissioner, therefore, was not justified in changing his stand. In this regard, the learned counsel has relied on the ratio of the following decisions : (1) CIT v. R. K. Metal Works [1978] 112 ITR 445 (Punj. Har.). (2) CIT v. Chawla Trunk House [1993] 139 ITR 182/[1980] 4 Taxman 543 (Punj. Har.). (3) CIT v. Shantilal Agarwalla [1983] 142 ITR 778/15 Taxman 107 (Pat.). 11. The learned counsel further urged that the realisation of a fixed asset cannot, for all purposes, fall into the category of income liable to tax under any of the heads provided under the Income-tax Act. The assessees have sold the silver utensils of domestic and personal use which were the fixed capital of the assessees. The sale of the fixed asset of the assessees did not give rise to the income to be assessed in the hands of the assessees. The sale of fixed assets resul ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er. He pointed out that on the facts and in the circumstances of the case, the gains on the silver utensils for domestic and personal use were in the nature of casual and non-recurring income. In this connection, he has drawn our attention to the decision of the Rajasthan High Court in the case of CIT v. Moti Chand Khajanchi [1988] 171 ITR 280/[1987] 34 Taxman 498, wherein the income from the sale of paintings was held to be assessable as a casual and non-recurring income. The learned senior departmental representative also relied on the ratio of the Rangoon High Court in CIT v. R. Johnstone [1980] 2 ITR 390. He also argued that under the provisions of section 263 of the Income-tax Act, the Commissioner need not issue any notice to a party. The only condition precedent for assumption of jurisdiction is that the assessee should be heard. In the case of the assessee, the Commissioner had given a hearing and the assessability under section 56 of the Act was discussed. The Commissioner was, therefore, justified in directing the Assessing Officer to assess the gains as income from other sources. The learned senior Departmental Representative, therefore, justified the assumption of juris ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... personal use of the assessees. The CIT also did not doubt that the personal effects was outside the purview of the definition of the capital asset. The CIT has merely revised the order on the ground that the gains on the silver utensils was income in the nature of casual and non-recurring. Such a change of opinion is not justified on the facts of the case. Such a change of opinion is also not warranted in view of the decision of the Bombay High Court in the case of Gabriel India Ltd. 18. Let us now examine whether the gains on the sale of silver utensils for domestic and personal use were in the nature of casual and non-recurring income. A casual receipt is one which occurs quite accidentally or fortuitously. It comes in without stipulation, contract, calculation or design. It is unanticipated and unforeseen. Sometimes, a casual receipt is described as one that depends upon the caprice or whim of the person who makes the payment. Casual is the antithesis of that which is governed by something more than mere chance, something out of which according to the probabilities of business or to the known course of practical experience, rational expectation of profit arises. The most impo ..... X X X X Extracts X X X X X X X X Extracts X X X X
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