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TMI Blog2003 (1) TMI 39X X X X Extracts X X X X X X X X Extracts X X X X ..... e ratio of the judgment in CIT v. Bai Shirinibai K. Kooka [1962] 46 ITR 86 (SC) was not applicable? Whether, on the facts and in the circumstances of the case, the Tribunal was correct in law in holding that the sale of finished products of three items of jewellery was in the nature of realisation sale of capital assets and not a trading activity of conversion of capital assets into stock-in-trade? Whether, the Tribunal was correct in law in holding that the sale of the precious stones of the family firm of Manna Lal Nirmal Kumar Soorana and Co. was not trading activity in respect of those sales, but was a sale of capital asset liable to capital gain? Whether, on the facts and in the circumstances of the case, the Tribunal was correct in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the assessee was that once the capital assets, which were disclosed under the voluntary disclosure scheme are converted into stock-in-trade account on the revaluation, which has been made at the time of conversion of the assets into stock-in-trade, that value should be taken for the purpose of profit in trading of these three items. This fact has not been accepted by the Assessing Officer. The Commissioner of Income-tax (Appeals) as well as the Tribunal both also found that these three items were not converted into stock-in-trade and they remained as capital assets, as disclosed, therefore, whatever value has been shown under the Voluntary Disclosure Scheme, 1975, that value should be taken and capital gain tax be charged accordingly. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... se [1962] 46 ITR 86. It is on this basis that the assessee has declared the gross profit of Rs. 3,07,655 in respect of the sale of the stones. 66. It has been the vehement contention on behalf of the assessee that it never had any trading in jewellery or precious stones in the past. We have accepted that contention of the assessee. It is also admitted by the assessee that after the sale of stones to the extent of Rs. 34,60,000 on October 21, 1976, and the sale of the precious metal obtained from three items on October 28, 1976, to one Maliram Puranmal, the assessee did not have any trading in jewellery or precious stones in any of the succeeding assessment years also. In other words, the sale of these three items of jewellery stands in iso ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nt', the 14 items remaining after the three items were taken out for sale were again distributed to the five members of the family, namely, Vimal Kumar Surana, Narender Kumar Surana, Nirmal Kumar Surana, Km. Nirmala Surana and Smt. B.D. Surana, by way of partial partition on August 16, 1978." Heard learned counsel for the parties. Whether the 17 items were converted into stock-in-trade account from the capital assets is basically a question of fact. While discussing the facts, the Tribunal found that the three items, which were disclosed in the Voluntary Disclosure Scheme, 1975, the value thereof has been shown at Rs. 9,70,950 and at the time of conversion, the value of these very items has been shown at Rs. 32,50,400. The Tribunal has als ..... X X X X Extracts X X X X X X X X Extracts X X X X
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