M.A. Baxshi, Vice President - (1.) THE appeal of the assesses for asst. yr. 1988-89 is directed against the order dt. 30th June, 1992, of CIT(A)-XXIII, Mumbai. Rival contentions have been heard and record perused.
(2.) The relevant facts in this case are that the appellant was born on 7th of January, 1972 and, therefore, was a minor till asst. yr. 1988-89. The return for asst. yr. 1988-89 was filed on 25th of July, 1990, after the assessee had attained the age of majority. A declaration under the Amnesty Scheme had been filed under the WT Act, 1957, on 31st of March ,1987, when the assessee was a minor. The silver utensils weighing 145.010 kgs. had been disclosed in trjfe wealth-tax return, The description of the silver utensils as per the valuation report is as under: JUDGEMENT_11541_TLIT0_20000.htm In the previous year relevant to asst. yr. 1988-89 the silver utensils weighing 97,549 kgs. with the following description had been sold on behalf of the minor: JUDGEMENT_11541_TLIT0_20001.htm
(3.) THE assessee did not offer any income by way of capital gains on the sale of silver utensils on the ground that these were personal effects and, therefore, the capital gain was not payable in respect of such assets. THE AO rejected the claim of the assessee on the following grounds : (1) That as per the decision of the Supreme Court in the case of H.H. Hemant Singhji v. CIT (1976) 103 ITR 61 (SC) at p 64, the expression "personal effects" as intended by the legislature to mean such articles which are intimately and commonly used by the assessee. Thus, the assessee cannot be said to have used the silver utensils intimately and commonly. (2) That the assessee was a minor till asst. yr. 1988-89. (3) That the assessee had disclosed total silver utensils weighing 145.010 kgs. in asst. yr. 1987-88 as per the return filed on 31st March, 1987, under the Amensty Scheme. Substantial quantity of silver utensils weighing 97.549 kgs. was sold on 11th Sept., 1987, i.e., just after few months of the disclosure. It has been pointed out by the AO that normally personal effects would be sold only in crisis. Since the assessee was a minor in the year of sale, she was wholly dependent on the parents and it cannot be said that she was in crisis. THE AO has also pointed out that the sale proceeds have been utilised in advancing loan to Okhla Steel Ind. (P) Ltd. (4) That the assesses had sold the silver utensils immediately after the disclosure and proximity of the events show that the silver utensils were the capital assets and not the personal effects as claimed by the assessee. (5) That the assessee has also sold silver utensils weighing 18.948 kgs. in asst. yr. 3989-90. This, according to the AO, establishes that the silver utensils were not held by the assessee as personal effects. (6) That the assessee is a member of family consisting of herself, father, mother, sister and brother. THE father did not own any silver utensils. However, other family members owned silver utensils weighing 173.038 kgs. It has been pointed out by the AO that the returned income and the household expenses as per records are not commensurate with the social status claimed by the family. (7) Relying upon the decision of the Madras High Court in the case of N. Ramanathan Chettair v. CIT (1985) 152 ITR 439 (Mad) it has been held that the Revenue is entitled to investigate whether the articles which are claimed to be personal effects were required for the personal use of the assessee or whether the articles are in excess of the requirement of personal use so as to fall within the definition of capital assets under Section 2(14) of the Act. (8) THE decisions of the Bombay High Court in the case of CIT v. Sitadevi N. Poddar (1984) 148 ITR 506 (Bom) and in the case of Jayantilal A. Shah v. CIT (1985) 156 ITR 448 (Bom) have been held to be distinguishable on facts.;