9911796707
TMI Blog1981 (9) TMI 36X X X X Extracts X X X X X X X X Extracts X X X X ..... of Rs. 40,000 held by her for her personal use from a period prior to 1954. In the absence of any information regarding the original cost or the fair market value as on January 1, 1954, the ITO had estimated the value and determined the capital gains at Rs. 28,000. The assessee had claimed before the ITO that no capital gains tax was chargeable on the above sum of Rs. 28,000 because the diamonds sold by the assessee were her movable property held by her for personal use. The ITO rejected the said claim. On appeal, the AAC confirmed the order of the ITO. On further appeal, the Tribunal followed its earlier order in several other cases of this group, wherein a similar question had arisen. The Tribunal held that the loose diamonds held by the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y the amendment made to s. 5(1)(viii) of the W T. Act so as to exclude jewellery from its scope. Applying that provision to the reported case, we went into the question as to whether loose diamonds could be held to be jewellery intended for personal use. Even on the basis that it was jewellery, we held that it could not have been intended for personal use. Even if the said decision does not govern the present case, we may consider the question in the light of s. 2(14) of the I.T. Act as it stood at the relevant time, which is now relied on before us. The relevant portion of s. 2(14) of the I.T. Act as it was in force prior to April 1, 1973, ran as follows: " ' Capital asset' means property of any kind held by an assessee, whether or not ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... wellery, whether held for personal use or not, is brought, in effect, within the main part of the definition and excluded from the exception. We do not see how wearing apparel could be held for other than personal use. If the wearing apparel is merely an heirloom then it would be a capital asset. Similarly, furniture held for personal use would not be a capital asset, so that its sale cannot produce capital gains. But, jewellery is intended to be taken out of the above category. Whether it is intended for personal use or not, it would stand out of the exception and would come within the main category of " movable property ". The sale of jewellery would thus be sale of capital assets and the gain would be capital gain. The question is accord ..... X X X X Extracts X X X X X X X X Extracts X X X X
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