TMI Blog2011 (7) TMI 512X X X X Extracts X X X X X X X X Extracts X X X X ..... ntested that the deemed annual value is not to be adopted for rental purposes - Decided against the assessee. - 1623 (KOL.) OF 2010 - - - Dated:- 22-7-2011 - S.V. MEHROTRA, MAHAVIR SINGH, JJ. Subash Agarwal for the Appellant. S.K. Roy for the Respondent. ORDER Mahavir Singh, Judicial Member. This appeal by assessee is arising out of the order of CIT(A)-XX, Kolkata in Appeal No. 341/CIT(A)-XX/Wd-33(1)/09-10/Kol. dated 9-6-2010. Assessment was framed by ITO-Ward-33(1), Kolkata under section 143(3) of the Income-tax Act, 1961 (hereinafter referred to as "the Act") for assessment year 2007-08 vide his order dated 31-12-2009. 2. The first issue in this appeal of the assessee is against the order of CIT(A) confirming the addition made by Assessing Officer treating sale of paintings as capital asset chargeable to capital gains. For this, assessee has raised following two grounds: "(1) For that on the facts and in the circumstances of the case, the ld. CIT(A) was not justified in confirming the addition of Rs. 62,52,500 made by the Assessing Officer treating the sale of paintings as transfer of capital asset chargeable to capital gain. (2) For that on the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd are only meant to fan the pride and self-importance of the appellant. Applying the judicial principles as emerging from the judgment of the jurisdictional High Court in the case of Smt. Shree Kumari Mudra v. CIT [1997] 228 ITR 548 (Cal.), the paintings cannot be termed as personal effects of the appellant. In view of the above, I am of the opinion that the Assessing Officer has rightly considered the sale of paintings as transfer of capital asset chargeable to capital gain. The action of the Assessing Officer is sustained. Ground Nos. 2 3 are dismissed." Aggrieved, now assessee is in appeal before us. 4. We have heard rival submissions and gone through facts and circumstances of the case. Before us, ld. Counsel for the assessee referred to the definition of capital asset as per section 2(14) of the Act whereby amendment was made in this section by Finance Act, 2007 with effect from 1-4-2008 substituting sub-clause (ii), which reads as under: "(ii) personal effects, that is to say, movable property (including wearing apparel and furniture) held for personal use by the assessee or any member of his family dependent on him, but excludes (a) jewellery; (b) archaeol ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... inference that any transfer of paintings to a person not specified in clause (ix) of section 47 of the Act, has to be regarded as transfer of capital asset chargeable to capital gains. The lower authorities relied on the decision of Hon'ble Calcutta High Court in the case of Smt. Shree Kumari Mundra v. CIT [1997] 228 ITR 548, wherein it was held as under: "From the above authorities, we find that items, to be classified as personal effects would have to be considered in the following light. Some degree of connection between the person of the assessee and the items is necessary. The assessee need not necessarily be able to wear the item on his or her person. Household items and utensils can also be personal effects although very expensive decorative pieces might not be classified as such. A distinction is to be borne in mind as between personal effects and assets intended for use in business or profession. It is on an assessment of these and other attendant relevant factors that a decision has to be reached whether the items which were sold were personal effects within the meaning of section 2, clause (14) or not. We do not have the benefit of the Tribunal's decision on whether ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... glish Language, at page 1075, the expression is given the following meaning: "Personal effects, privately owned articles consisting chiefly of clothing, toilet items, etc., for intimate use by an individual." In Black's Law Dictionary, Fourth Edition, at page 1301, the expression is assigned the following meaning : "Personal effects, articles associated with person, as property having more or less intimate relation to person of possessor." In Cyclopaedic Law Dictionary, Third Edition, at page 832, the expression "personal effects" without qualifying words is interpreted to include generally such tangible property as is worn or carried about the person. In "Words and Phrases" (permanent edition), volume 32, at page 277, it is stated that the words "personal effects" when used without qualification, generally include such tangible property as is worn or carried about the person, or to designate articles associated with the person. At another place at the same page, it is stated that the words "personal effects" are used to designate articles associated with person, as property having more or less intimate relation to person of possessor or such tangible property as attends ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... vereigns, bullion and silver coins can by no stretch of imagination be deemed to be "effects" meant for personal use. The facts in the present case are that the assessee has sold old paintings and claimed the same in the nature of personal effects and are not covered within the definition of capital asset of section 2(14)(ii) of the Act. Can these paintings be, considered as personal effects of the assessee? If so, are they excluded from the definition of "capital asset" under section 2(14) of the Act, which means " property of any kind held by an assessee but does not include (i)... ; (ii) personal effects, that is to say, movable property (including wearing apparel and furniture, but excluding jewellery) held for personal use by the assessee or any member of his family dependent on him; ". The assessee stated that these paintings were held by him for personal use of himself and members of his family dependent on him. These paintings were as such required for their personal use and the use of members of his family as well. We find that Hon'ble Bombay High Court in the case of CIT v. Smt. Sitadevi N. Poddar [1984] 148 ITR 506/17 Taxman 345 considered a similar question in a somewha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he addition made by Assessing Officer on deemed rent from house property, which is not in self-occupation. For this, the assessee has raised the following ground No. 3: "3. For that on the facts and in the circumstances of the case, the ld. CIT(A) was not justified in confirming the addition of Rs. 1,26,000 made by the Assessing Officer on account of deemed income from house property on the basis of the report of the Departmental Inspector." 8. We have heard rival submissions and gone through facts and circumstances of the case. We find that the concurrent finding of the lower authorities is that assessee offered his house property at 7, Harington Road, Kolkata to be treated as his residential house and whereas another house property i.e. residential house at 10, Gurusaday Road, Kolkata was treated as vacant and no income was offered from this residential house i.e. newly purchased house. The Assessing Officer deputed his Inspector to ascertain annual value of the house property, who reported after verification in the locality that this property may fetch a rent of Rs. 15,000 to Rs. 20,000 per month. On the basis of the same, Assessing Officer estimated the annual value of the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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