1980 (7) TMI 118

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..... 2 5. Elephant Hauda Silver 1 2. The assessee claimed before the ITO that these were the items of house hold use or personal use and as such the profit on the sales of these items could not be assessed as capital gain. The ITO, however, did not agree with the contention of the assessee. He accordingly brought to assessment a sum of Rs. 45,000 as capital gain. 3. Aggrieved by this order, the assessee filed an appeal before the AAC and made detailed submissions. The AAC examined the claim of the assessee in an elaborate order and came to the conclusion that since these items were items of furniture and of house-hold use, the surplus thereon could not be assessed as capital gain. He accordingly allowed the appe .....

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..... f 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 store or raw-material held for the purpose of his business or profession. (ii) Personal effects i.e. to any movable property (including wearing apparel, jewellery and furniture) held for personal use by the assessee or any member of his family dependent on him". Explanation: For the purpose of this sub clause, "Jewellery" includes: (a) Ornaments made of gold, silver, platinum or any other precious metal or any alloy containing one or more of such precious metals, whether or not containing any precious or semi-precious stone, and whether or not worked or sewn into any wearing apparel; .....

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..... Personal effects means all those items which are held for personal use by the assessee. This is a clear and precise definition and it is eminently desirable to adhere to the statutory words. In Hemant Singi vs. CIT (1) the Supreme Court held that the bullion or coins which are meant to be used for worship of deities on special occasions are not personal effects and observed that by the expression, personal effects, the legislature intended only those articles to be included in the definition which are intimately or commonly used by the assessee. The ld. Authors of the Law and Practice of Income-tax Seventh Edition, Volume I, by N.A. Palkhivala and B.A. Palkhivala have commented that it is too narrow a construction of personal effects in the .....

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