COMMISSIONER OF INCOME TAX Vs. AMMINI VAROO

JUDGEMENT

(1.) THE following question has been, at the instance of the Revenue, referred to us by the Income-tax Appellate Tribunal, Cochin Bench :

(2.) DURING the year relevant to the assessment year 1976-77, the assessee sold about 240 items of silverware, including dinner plates of different sizes, goblets of different kinds, finger bowls, jugs and the like for a sum of Rs. 1,64,340. These articles had been purchased by her years earlier and their cost of acquisition in 1961 was determined by the Income-tax Officer at Rs. 29,880. The difference in value was treated by the Officer as long-term capital gains. The assessee's claim that they were personal effects and were, therefore, excluded from the definition of "capital asset" under Section 2(14) of the Income-tax Act, 1961, was rejected by the Officer. This finding was confirmed by the Commissioner of Income-tax (Appeals). The Tribunal, on further appeal by the assessee, accepted the contention that the articles were personal effects. The Tribunal stated :

(3.) REFERRING to this principle, counsel for the Revenue, with some justification, contends that the Tribunal misdirected itself in law. It is most unusual that a person should keep numerous silver plates, silver goblets and the like for personal or household use. These articles are, if at all, seldom ever used for personal or household purposes. But then whether in a given case they were so used or normally, commonly or ordinarily intended to be so used is a question of fact, the finding of which, in the absence of a challenge, is not open to question in the present proceeding. Rightly or wrongly the Tribunal, to which the assessee's representative had enumerated the occasions on which these articles were used, accepted the assessee's claim that they were intended for personal or household use and were in fact so used on "various occasions" every year. The Tribunal's reference to "various occasions" implies that these articles were not only "capable of being intended for personal or household use", but were "normally, commonly or ordinarily intended" for such use, and were in fact so used on those occasions. On what evidence the Tribunal came to that conclusion, we do not know. Whether the Tribunal was justified in drawing that inference merely because the assessee's representative stated so, and whether that finding was perverse for want of reasonably acceptable evidence, is a matter on which we cannot express any view in the absence of a specific challenge. In the circumstances, the question must necessarily be answered, as we do, in the affirmative, that is, against the Revenue and in favour of the assessee.