9911796707
TMI Blog1998 (5) TMI 5X X X X Extracts X X X X X X X X Extracts X X X X ..... States, New Delhi, had accepted certain heirloom jewellery as private properties of His late Highness Maharaja Keshaw Rao Holkar of Indore. These included a "Sirpech" and a ceremonial belt. All the listed jewellery and gold in the Huzur Jawahirkhana at Indore in 1949 and used by the Ruler of Indore on ceremonial occasions as in the past, were exempt under the provisions of section 5(1)(xiv) of the Wealth-tax Act. During the accounting year relating to the assessment year 1972-73, the assessee sold two items of heirloom jewellery for Rs. 13,80,001. The assessee claimed before the Tribunal that the heirloom jewellery constituted personal effects of the assessee within the meaning of section 2(14) of the Income-tax Act, 1961, and, therefore, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... from capital assets include jewellery for personal use. We have to consider whether jewellery held for personal use by the assessee would cover heirloom jewellery of the assessee. Heirloom jewellery is also meant for the personal use of the assessee. It is, however, not meant for daily use but for use on ceremonial occasions. This does not deprive such jewellery of its character as jewellery meant for personal use. For example, clothes meant for use at weddings or formal occasions are not used daily. Yet they are stitched for personal use of the wearer. As such, they would form a part of his personal effects. Heirloom jewellery may be passed down from generation to generation. But it is nevertheless for the personal use of the owner. The Hi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... iture, mentioned by way of illustrations in the definition of "personal effects" also showed that the Legislature intended only those articles to be included in the definition which were intimately and commonly used by the assessee. Jewellery is expressly included in the personal effects of an assessee as per section 2(14) as it stood at the relevant time. In the case of CIT v. Sitadevi N. Poddar [1984] 148 ITR 506 (to which one of us was a party) the Bombay High Court considered a case where the assessee sold certain silver utensils of the type which were used in the kitchen or in the dining room. The assessee contended that the silver articles were the personal effects of the assessee and hence were not capital assets within the defini ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssee. It was found that the articles were kept in a show-case in the drawing room of the assessee. The court, therefore, held that though the articles had the shape of household articles, they were neither regarded as household utensils by the assessee nor were they used or intended to be used as such. They were not personal effects of the assessee. In the present case, however, the jewellery is to be worn on the person of the assessee. It would, in any event, form a part of the personal effects of the assessee. In the premises, since the definition of "capital asset" in section 2(14) does not include personal effects including jewellery, the High Court rightly came to the conclusion that on the facts found by the Tribunal, the items of j ..... X X X X Extracts X X X X X X X X Extracts X X X X
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