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TMI Blog2011 (7) TMI 512X X X X Extracts X X X X X X X X Extracts X X X X ..... to capital gain. (2) For that on the facts and in the circumstances of the case, the ld. CIT(A) erred in not considering that the ld. Assessing Officer made the addition mentioned in ground No. 1 by making a wrong interpretation of section 2(14) and section 47(ix)." 3. Brief facts leading to the above issue are that Assessing Officer during the course of assessment proceedings noticed that the assessee received a sum of Rs. 62,52,500 on account of sale proceeds from sale of old paintings, which were inherited by assessee. The Assessing Officer required the assessee as to why same shall not be considered as long term capital gain chargeable to tax. Assessing Officer finally treated the sale proceeds of paintings as capital asset transferred as chargeable to long term capital gain and accordingly, he charged. Aggrieved, assessee preferred appeal before CIT(A), who also confirmed the action of Assessing Officer by giving following finding in para 7 as under: "7. I have considered the rival submissions. I am inclined to agree with the Assessing Officer that any transfer of painting to a person other than those specified in section 47(ix) has to be regarded as transfer ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... but excludes- (a) jewellery; (b) archaeological collections; (c) drawings; (d) paintings; (e) sculptures; or (f) any work of art." Accordingly, he stated that the sale of paintings is now brought into the ambit of capital asset but with effect from 1-4-2008 i.e., for and from assessment year 2008-09 and the relevant assessment year involved in assessee's case is 2007-08. On the other hand, ld. DR relied on the orders of the lower authorities. 5. We find that undisputed facts are that the assessee sold out old paintings inherited by him and received sale consideration of Rs. 62,52,500. Whether paintings fall under personal effect as defined in section 2(14) of the Act prior to amendment by the Finance Act, 2007 whereby clause (ii) reads as under: "(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." We find that the lower authorities have relied on the provisions of section 47 of the Act particularly clause (ix) whereby, according to lower aut ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... old 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 the silver utensils were considered by the Tribunal to be personal effects or not, it not having been first persuaded that the items sold were silver utensils as claimed. Since it shut out relevant material on the proof of the utensils to be such, it created a self-imposed bar in not properly considering whether the silver utensils were personal effects or not. We might mention that whether these items were personal effects or not were matters of discussion before the lower authorities and the assessee did not get a favourable result. The Tribunal found that justified. In giving our opinion on this aspect of the matter, we first note that the plates, glasses, etc., were none of them outsized. For example, 11 glasses, 6 plates and four bowls in all weighed 11 kg. The glasses, bowls, etc., are not, on any reasonable view of the matter, items of drawing room decoration or such valuable items as to fan only the pride and self-importance of the assessee. The items were not also so valuable as to become a capital asset or a saving or investmen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... associated with person, as property having more or less intimate relation to person of possessor or such tangible property as attends the person. Bearing in mind the aforesaid meaning assigned to the expression in various dictionaries and cases, the silver bars or bullion can by no stretch of imagination be deemed to be "effects" meant for personal use. Even the sovereigns and the silver coins which are alleged to have been customarily brought out of the iron safes and boxes on two special occasions, namely, the Ashtami Day of "Sharadh Paksh" for Maha Lakshmi Puja and for worship on the occasion of Diwali festival cannot also be designated as effects meant for personal use. They may have been used for puja of the deities as a matter of pride or ornamentation but it is difficult to understand how such user can be characterised as personal use. As rightly observed by the income-tax authorities if sanctity of puja were considered so essential by the assessee, the aforesaid articles would not have been delivered by his guardian to the banks for sale." 6. From the above, we are of the view that the amendment brought by Finance Act, 2007 with effect from 1-4-2008, whereby definition of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 somewhat different context. In that case, the assessee had sold certain silver utensils. The court held that such utensils were personal effects because they were ordinarily intended for personal or household use. In the case of H. H. Maharani Usha Devi v. CIT [1982] 133 ITR 43 (MP), jewellery which was meant for use by the assessee on ceremonial occasions was considered as "personal effects" of the assessee. The revenue, however, placed emphasis on the observations made by Hon'ble Supreme Court in the case of H. H. Maharaja Rana Hemant Singhji (supra). In that case, Hon'ble Supreme Court was required to consider old silver rupee coins, gold sovereigns and silver bars which were used by the assessee on religious festivals. Hon'ble Supreme Court observed that silver bars or bullion can, by no stretch of imagination, be deemed to be "effects" meant for personal use. In that case, Hon'ble Supreme Court has in effect held that the expression "intended for personal or household use meant normally, commonly or ordinarily intended for personal or household use. It w ..... X X X X Extracts X X X X X X X X Extracts X X X X
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