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TMI Blog2024 (6) TMI 972X X X X Extracts X X X X X X X X Extracts X X X X ..... t and the assessee would be eligible to claim benefit of set off of loss on sale of motor car against other capital gains made by the assessee HELD THAT:- Whether a motor car is a capital asset or not, or would qualify as a personal effect and hence falling outside, the purview of a capital asset would depend upon the use to which the motor car has been put by the assessee. In case, as held in the aforesaid decision NARENDRA I. BHUVA [ 2003 (5) TMI 519 - ITAT MUMBAI] the motor car is not at all used for personal purposes, but has been held as an asset i.e. possession of pride as a collector s item, then the sale thereof would attract capital gains. Similarly, if it is found that the motor car is for business purposes, then the assessee woul ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e of Shri Babula Solanki [ 2019 (4) TMI 694 - ITAT AHMEDABAD] such cases will come within the review of Section 263 of the Act. Appeal of the assessee is dismissed. - SHRI WASEEM AHMED, ACCOUNTANT MEMBER SHRI SIDDHARTHA NAUTIYAL, JUDICIAL MEMBER For the Appellant : None For the Respondent : Shri Shramdeep Sinha, CIT DR ORDER PER SIDDHARTHA NAUTIYAL, JM : This appeal has been filed by the assessee against the order passed by the Ld. Principal Commissioner of Income Tax, (in short Ld. PCIT ), Rajkot-1 in DIN Order No. ITBA/REV/F/REV5/2020-21/1030295644(1) vide order dated 03.02.2021. 2. The assessee has taken the following grounds of appeals:- 1. The honorable Pr. Commissioner of Income Tax, Rajkot 1 erred in passing order under Section. 26 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eedings were unsustainable in law for the aforesaid reason. 5. However, PCIT did not accept the contention of the assessee and set aside the order with the following observations: 7. As per section 2(14) personal effects are not to be treated as capital asset and the car was a personal asset outside the purview of section 2(14) of I. T. Act. There is nothing on record which may-indicate that the car against which capital loss was claimed was even used for business purposes. It is also fact that during assessment proceedings the AO has not at all examined this issue. This facts will indicates that allowing of capital loss against sale of car treating the same as capital asset was the contravention of section 2(14) of I. T. Act, has rendered ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . The assessee in appeal before us against the order passed by PCIT holding the assessment order as erroneous and prejudice to the interest of the Revenue. Before us, none appeared on behalf of the assessee. 7. Before us, the DR placed reliance on the case of H H. Maharaj Rana. V CIT, 1976 AIR, 662 , which has held that Section 2(4A) of Income Tax Act, 1922 provides that personal effects that is to say movable property (including wearing apparel, jewellery and furniture) held for personal use by the assessee or any member of his family, dependent on him shall not be included in the capital assets of the assessee. Accordingly, the DR submitted that the assessing officer had clearly erred in fact and in law in allowing the claim of set off of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rendra I. Bhuva 90 ITD 174 (Mumbai), the ITAT held that test, which is to be applied for ascertaining whether a particular asset is personal effect , would be whether particular asset was intimately and commonly used by assessee. In this case, Assessee, a salaried employee, purchased a Ford Tourer 1931 Model car sometime in 1983. He never used that car and parked it at his family resident. Subsequently, he sold that car and claimed that income therefrom was not taxable as he had purchased said antique car as a pride of possession and, thus, it was a personal effect . The ITAT held that pride of possession cannot be characterized as personal use and thus, antique car held, but never used by assessee was not a personal effect as occurring in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... for this reason as well. In this case, the PCIT has correctly observed that the assessee was using the car for his daily/personal purposes and hence qualified as personal effects i.e. movable property held for personal use by the assessee. Therefore, in the instant facts, the PCIT has correctly observed that from the facts apparent on the face of record, the motor car qualified as a personal effect of the assessee, and was falling outside, the purview of capital asset and was coming under the definition of exclusions to Section 2(14) of the Act. Further, it is well settled law that even if the issue has been examined by the assessing officer, but a view has been taken, which is apparently an incorrect position of law as evident from the fa ..... X X X X Extracts X X X X X X X X Extracts X X X X
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