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TMI Blog1993 (9) TMI 138X X X X Extracts X X X X X X X X Extracts X X X X ..... different dates sold gold ornaments and silver articles which included Jaris, Katora and Kalva used in the temples for pooja purposes. A sum of Rs. 2,09,000 was realised from the sale of gold ornaments and Rs. 16,736 from the sale of silver ornaments. According to the assessee, she was not liable to capital gains tax on the surplus realised in respect of sale of those gold ornaments and silver articles as they were her personal effects though used for pooja purposes from which she derived and declared income and since personal effects are not considered as capital asset within the meaning of s. 2(14) of the IT Act 1961, no capital gain accrued or arose to her. A note was, therefore, appended by the assessee to the statement of taxable income accompanying the return of income. The Assessing Officer during the course of finalisation of assessment proceedings did not agree with the assessee's contention and subjected the sale proceeds to capital gain tax, but gave deductions as are available under s. 80T of the Act. According to the Assessing Officer gold ornaments and silver articles were jewellery as defined in the Expln. to s. 2(14) of the IT Act and to s. 5(1)(viii) of the WT Act. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssee for performing pooja and other rituals performed at the two temples and the income declared by the assessee from the two temples amply established that those items/assets were not held or used by her as personal effects. The Departmental Representative also emphasised that neither in the past nor during the previous year the assessee had led any evidence that the said assets were used as personal effects or were her personal belongings the sale of which did not attract any capital gains tax. The view taken by the Appellate Commissioner in the impugned order is wholly erroneous and not to be sustained in the present appeal. 5. Shri J.P. Shah, counsel who appeared before us for the assessee, submitted that gold ornaments and silver articles which were sold were neither jewellery nor capital assets but were assets used by the assessee as her personal belongings and, therefore, the surplus realised on those assets cannot be brought to tax under s. 45 of the Act. According to Shri J.P. Shah, the Appellate Commissioner correctly understood the facts of the assessee's case and gave relief. Relevant passages were read out by him from the judgment of the Bombay High Court in the case ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... iled by the assessee's counsel. On a further specific query from us, the assessee's counsel replied that the Jaris resembled glass-tumbler with a funnel like opening on the top portion and were used in the temples for giving bath to the deity by pouring Gangajal at the time of Sandhya pooja. 7. We have given our anxious consideration to the facts of the case as well as the submissions and contentions advanced by the learned representatives of both the sides. The cases relied upon by both the sides were also thoroughly studied. The question to be decided is whether the gold ornaments and silver articles sold by the assessee were jewellery and if in the negative, whether the same were personal effects so as to get excluded from the definition of the capital asset as laid down in s. 2(14) of the Act. The provisions of s. 2(14) read as under: "'capital asset' means property of any kind held by an assessee, whether or not connected with his business or profession, but does not include— (i) any stock-in-trade, consumable stores or raw material held for the purposes of his business or profession; (ii) personal effects, that is to say, movable property (including wearing apparel an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rticles at the temples for performing pooja of the deity and were, therefore, in the nature of personal effects. We are unable to subscribe to this argument and contention raised by the assessee's counsel. Their Lordships of the Bombay High Court in G.S. Poddar's case have held that the personal effects should be such as are normally, commonly or ordinarily intended for personal or household use. This view of the Bombay High Court has been approved and upheld by the Hon'ble Supreme Court in the case of H.H. Maharaja Rana Hemant Singhji. To determine whether particular articles are of personal use or not, its dominant object and prominent purpose has to be seen. It is no doubt true that an asset/article may be used in a business or profession but at the same time there can be limited user by any assessee of such articles/assets for personal purposes. But such limited or partial user cannot make such assets/articles as intended for personal use or constitute personal effects so as to get excluded from the definition of capital asset as per s. 2(14) of the Act. To cite an example, an architect may use his professional tools and instruments for drawing up plans and designs for his own ..... X X X X Extracts X X X X X X X X Extracts X X X X
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