TMI Blog1985 (12) TMI 64X X X X Extracts X X X X X X X X Extracts X X X X ..... hirdly, one of the sales bill did not contain necessary details or particulars of utensils sold. Thus, according to the ITO, the assessee had given details of sales of 33.11 Kgs. The details of remaining utensils weighing 46.89 Kgs. were no available. Lastly, the silver utensils were not the article of daily use, but represented wealth of the assessee. In the above view of the matter, the ITO brought to tax a sum of Rs. 40.813, as capital gains, after giving statutory deduction under s. 80T of the Act. 3. Being aggrieved the assessee carried the matter in appeal before the CIT(A) and contended that the assessee had held 106 Kgs. of silver out of which 80 Kgs. of silver utensils were sold. Relying on the decision of the Tribunal referred to in para 6 of the order of the CIT(A), it was contended that the silver utensils being articles of personal use should not be treated as a capital asset. According to the CIT(A), the assessee's claim was sustainable, in regard to sale of 33.11 Kgs. being the items described in one of the bills produced by the assessee. As regards, the balance amount, he held that in absence of any details, the assessee's claim was not tenable. He, therefore, up ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... at 224 (Guj) High Court observed as follows: "Moreover, in the case of each assessee, depending upon his personal status, class of society, habits, customs, notions, usages, etc., the category of articles intended for personal use will have to be decided." Keeping in mind the above decisions, it is clear firstly that the articles in question were silver utensils like Thalis, Vatkas etc. and this fact is eminently established by the statement of net wealth filed by the assessee in the course of wealth-tax proceeding and the WTO had accepted the claim of the assessee, in this regard. Secondly, the words intimate use has to be broadly construed having regard to the social status of the person and should not be confined to actual daily use. In other words, the test applied by the ITO for the actual user by the family, having regard to the size of the family, is not the correct test. The nature of the articles namely silver utensils like Thalis etc., are normally used at the time of dinner or on auspicious or festive occasions not only for the use of the family, but also to entertain guests and relations. Therefore, by very nature of the articles, it cannot be said that they were ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... be regarded as the personal effects of the assessee. Therefore, the silver articles used by the assessee for entertainment of guest cannot be regarded as his personal effects. The tenor of the Supreme Court's observations quoted above is such that the use by the guests cannot be regard as personal use by the assessee. Intimate connection between the effects and the person of the assessee is required. The test requires that the articles should be intimately and commonly used by the assessee. When, the assessee's guests use them it cannot be said that the assessee has used them in that manner. Secondly, the definition of capital asset provides for use by a member of the assessee's family dependent upon him. It is important to note that not even those members of the assessee's family are included in this, if they are not dependent upon him. When this is so, surely, by implication the guests cannot be included. Thirdly it is obvious from this definition of capital asset that the legislature wanted to lay down some definite and objective criteria which would also limit a number of persons for whom the exception can be made. If the guests are to be taken into account the number would be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l preferred by the assessee in regard to the balance of sale covering 46.89 Kgs., the learned Accountant Member gave a finding that rejection of the assessee's claim on the ground of absence of details does not survive because the fact that the articles in question were silver utensils like thalis, vatkas, etc. is estinently established by the statement of net wealth filed by the assessee in the course of wealth-tax proceedings and which claim has been accepted by the WTO, and the necessary particulars were filed by the assessee in wealth-tax proceedings much earlier. 3. He held that having regard to the nature of the articles, viz., silver utensils like thalis, etc. which were normally used at the time of dinner or on auspicious or festive occasions, not only for the use of the family, but also to entertain guests and relations, it cannot be said that they were not intended for personal use. He, therefore, upheld the claim of the assessee that in regard to the sale of silver utensils weighing 46.89 kgs. capital gains charge was not attracted. 4. The learned judicial Member has disagreed with the learned Accountant Member. According to him, the assessee would be liable for ca ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... member of the assessee's family dependent upon him and not even other members who are not dependent upon him. He, therefore, submitted that he view in the observations of the ld. Judicial Member that only that number of silver utensils which equal to the number of persons made up of the assessee and members of his family who are dependent upon him, are to be excluded and not other which are used by the guests is not justified because there is no finding at any stage that any of the utensils held by the assessee which were sold were kept or ear-marked for the use of the guests or other members who are not dependent upon the assessee. He then relied on the decision of the Bombay High Court in Jayantilal A. Shah vs. K. N. Anantharam Aiyar, CIT (1985) 156 ITR 448 at 450 (Bom), wherein it is held that for being considered as personal effects the concerned articles need not be necessarily used daily and it is sufficient if they are meant for personal use. He also referred to the meaning of the word 'utensil' in the Shorter Oxford English Dictionary, Third Edition, Volume II at page 2443 wherein the meaning given is Domestic vessels, appliances and furniture; Any article useful or necess ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uld be clear from the point of difference referred viz., where the assessee would be liable for capital gains on the sale of silver utensils weighing 46.89 kgs. Now, as pointed out by the learned counsel for the assessee there is no material on record to hold that any of the utensils sold were specifically intended for use by the guests or that so far as such utensils are concerned, it could be said that they are not meant for personal or household use by the assessee. Therefore, I am of the view that there is no basis for the assumption that silver articles used by the assessee which were intended for the guests cannot be regarded as personal effects. Probably the observation of the learned Accountant Member in para 5 of his order that the nature of articles like silver utensils like Thalis, Vatkis etc. indicates that they are normally used at the time of diner or auspicious or festive occasions not only for the use of the family but also for entertaining guests and relations has given cause of the assumption. I do not think that the observation of the ld. Accountant Member was a finding of fact supported by materials considered by him in this regard. It appears to be a general ob ..... X X X X Extracts X X X X X X X X Extracts X X X X
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