H. H. MAHARAJ RANA HEMANT SINGHJI, DHOLPUR versus COMMISSIONER OF INCOME-TAX, RAJASTHAN

Citation: [1976] 3 S.C.R. 423 · Decided: 17-02-1976 · Supreme Court of India · Bench: A.C. GUPTA · Disposal: Dismissed

Cited by 1 judgment(s) · see the full citation network in Lexace

Judgment (excerpt)

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423 
H. H. MAHARAJ RANA HEMANT SINGHJI, DHOLPUR 
v. 
COMMISSIONER OF INCOME-TAX, RAJASTHA..N 
February 11, 1976 
[A. C. GUPTA AND JASWANT SINGH, JJ.] 
lnconze Tax Act (11 of 1922), s. 2(4A)(ii)-:-'Personal efjects',_~:h_at are. 
Section 2(4A) (ii), Income Tax Act, 1922, provides that 'perSOnal effects, 
that is to say. movable property (including wearing apparel, jewellery, and 
[urniture) held for personal use by the assessee or any member of his family 
dependent on him: shall not be included in the 'capital assets' of th~ assessee •. 
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B 
· The context in which the expression 'personal effects' 
oCcurs 
and 
the 
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enumeration of articles like wearing apparel, jewellery an4 furniture, -show that 
only those articles are to be included as peisonal effects which are intimately 
and comm0nly used by the assessee. The dictionary meaning of the expression 
is also the same. Therefore, 'personal effects' mean those items ·which are 
normally. commonly or ordinarily intended for personal use and not items 
\\'hich are capable of being intended for personal use. [425E-426F-427CD] 
Where the assessee was in passession of a large number of gold sovereigns, 
silver rupee coins and silver bars, which were used at the time of the puja 
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of deities on special reli~ious festivals or rituals. they could J!Ot be deemed 
to be ·effects• meant for personal use. Tuey are capital assets and not personal 
effects and so, when sold, could not be excluded while computing the capital 
gains liable to capital gains tax unde.r s. 12B, Income Tax Ac4 1922. [427F] 
G. S. Poddar v. The Commissioner of Wealth Tax, Bon1baf City, II, I.L.R. 
11965) Born. 1062, approved. 
CML APPELLATE JURISDICTION : Civil Appeal No. 779 of 1971. 
Appeal by special leave from the judgment and order dated the 
2nd December, 1969 of the Rajasthan High Court in I.T.R. No. 5 
of 1966. 
S. T. Desai, Rameshwar Nath, for the appellant. 
B. B. Ahuja and S. P. Nayar, for the respondent. . 
The Judgment _of the Court was deliver.::d·bY· 
-·JASWANT SINGH, J.-This appeal by special 
J~ve is directed 
against the judgment dated Dec~mber 2,, 1969 of the High Court of 
Rajasthan. 
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Briefly stated the facts giving rise to this appeal are : Maharaja 
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Shri Udebhan Singhji of Dholpur died issueless on October 22, 1954. 
On the day following his demise all the movable valuables possessed 
by him were taken over and sealed by the Government of Rajasthan 
because of the dispute regarding succession to the gaddi. 
On Decem-
ber 13, 1956 Maharaja Shri Hemant Singhji, the appellant 
herein, 
who was then a minor, was recognised by the Government of India 
as successor of the forriler Maharaja and the aforeSaid assets which 
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inter alia consisted of 4,825 gold sovereign, 7 ,90,440 old silver rupee 
coins and silver bars weighing. 2,54,174 totals were released by the 
Rajasthan Government and handed over to Rajmata in her capacity 
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424 
SUPREME COURT REPORTS 
[1976] 3 S.C.R. 
as the adoptive mother and guardian 0£ the appellant on March 24, 
1957. 
During the financial year 1957-58, the aforesaid sovereigns, 
silver coins and silver bars wete sold at the suggestion of the Govern-
ment of India for a net consideration of Rs. 20,78,257. Overruling 
the contentions raised on behalf of the appeUant to the effect that as 
there was no voluntary sale chargeable to capital gains tax under 
section 12B of the Indian Income Tax Act, 1922, hereinafter referred 
to as 'the Act',, and the aforesaid items did not constitute 
'capital 
assets' as contemplated by section 2 ( 4A) of the Act but fell within 
the purview of the exception carved out by clause (ii) thereof and as 
such were to be excluded in computing the gains because they were 
held for personal use by the assessee and the members of his family as 
was evident from the fact that they were used for the purpose of 
Maha Lakshmi Puja and other religious festivals and rituals in the 
family, and taking into account the market value of the assets as on 
January 1, 1954, the Income Tax Officer, Bharatpur, worked out 
capital gains at Rs. 3,44,,303. 
Dissatisfied with this order, the appel-
lant took the matter in appeal to the Appellate Assistant Commissioner 
but remained unsuccessful. 
A further appeal to the Income 
Tax 
Appe_llate Tribunal was taken by the appellant but the same also 
proved abortive as the Tribunal was of the view that the expression 
"'personal effects" meant such items

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