# H. H. MAHARAJ RANA HEMANT SINGHJI, DHOLPUR v. COMMISSIONER OF INCOME-TAX, RAJASTHA N

- **Citation:** [1976] 3 S.C.R. 423
- **Court:** Supreme Court of India
- **Decided:** 1976-02-11
- **Case number:** Civil Appeal No. 779 of 1971
- **Bench:** A. C. Gupta, Jaswant Singh
- **Source:** https://unisonlegal.in/judgment/supreme-court-of-india/h-h-maharaj-rana-hemant-singhji-dholpur-v-commissioner-of-income-tax-rajastha-n-6751
- **Pages:** 5

## Headnote

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 •.
A
B
· The context in which the expression 'personal effects'
oCcurs
and
the
C
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
D
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.
E
F
Briefly stated the facts giving rise to this appeal are : Maharaja
G
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 December 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
H
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
A
B
c
D
E
F
G
H
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 Government 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 appellant took the matter in appeal to the Appellate Assistant Commis

## Text

l
I
'-~-----'
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 •.
A
B
· The context in which the expression 'personal effects'
oCcurs
and
the
C
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
D
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.
E
F
Briefly stated the facts giving rise to this appeal are : Maharaja
G
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 December 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
H
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
A
B
c
D
E
F
G
H
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 Government 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 appellant 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 of movable property as
were
necessary adjuncts to an individual's. own personality and the nature
of sale befug voluntary or otherwise was irrelevant for the purpose of
section 12B in.view of the decision of this Court in James Anderson v.
Commissioner of Income Tax, Bombay City(!). The Tribunal, however, referred the following question of law at the instance of the appellant to the High Court of Rajasthan at Jodhput under section 66( I)
of the Act:
"Whether on the
facts and in the
circumstances of
the case the assets sold were capital assets within the mea)).~
ing of section 2( 4A) ch~geable to capital gains tax under
section 12B of the Income-tax Act, 1922."
By its order da.te<;I Decembe.r 2, 1969,, the High Court answered
the question in the affirmative holding that in order that an article
should constitute ·a part of personal effects, it is necessary that the
article must be associate.ct. with the person of the JlPSSC~sor. and that
the aforesaid . items . consisting of gold sovereigns, silver . rupees and
sjlver barS could not· be deell,led to ·fall within the exceptit>tn::arved
out by clause (ii) of s'ection, 2(4A•)· of die Act merely because they
were placed before Goddess Lakshmi while performing Prija, The
appellant thereu~n made, an appiicatiqn, to. the High Court qf ):lajasthrui' for a cettifica~ of::Jitness , which was. iefu&ed.. . T\ieteafter, the
apjien;pit _aPP,J!,e~. 10: tlii~. t»urr: tOi: s~cl;il leave iii)der Article '131i of
ilie Constitu!lqn \Vhicll was granteq on May 6, 1971.
·. •. A~~aring in support of th"~ ap~, Mr. Des~i has vcliernently
contbH4ed that.the questibn i!s tt> whether an iteth ·bf mo:vable prt>-
perty· held for ·petsdnaHtise is a part Of r:_rsonal e~t~. of- an assessee
shotlltt .!AA <le\enbine<! ·not in· a comm@itial.se118e· but accorol»g t& the
:
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•
•
HEMANT SINGHJI v. C.I.T, (Jaswant Singh, ].)
425
ordinary ideas,. habits, customs and notions of the class of society to
A
whicll the assessee belongs or according to the well established habits,
customs and traditions of his family.
He has in support of his contention reforred us to a
decision in Commissioner of Wealth-tax
Gujarat v. Arundhali Balkrishna(').
He has further urged that in
construing section 2(4A) of the Act it must be borne in mind that
the Legislature intended to lay emphasis on the nature of the use of
the article rather than 9n the person of the assessee.
B
Mr. B. B. Ahuja appearing for the Revenue has, on the other
hand, urged that the inte_rpretation sought to be placed on behalf of
the assesse~ on the expression "personal effects" is not correct and
while detennining whether the effects are personal it is essential to see
whether they are meant for the personal use of the assessee.
We have given our earnest consideration to the submissions, of
learned counsel for the parties.
For a proper decision of the point
in question, it is necessary to refer to section 2 ( 4A) of the Act, the
relevant po;:tion whereof ruus thus :
"2(4A). 'Capital asset' means property of any kind
held by an assessee,, whether or not connected _with his business, profession or v0<;ation, but does not include-
(i) ..................... .
c
D
(ii) personal effects, that is to say, movable property
(including wearing apparel, jewellery, and furniture)
held for personal use by the assessee or any member
of his family dependent on him;"
E
The expression "personal use" occurring in
clause (ii) of the
above quoted provision is very significant.
A close scrutiny of the
context in which the expression occurs shows that only those effects
can legitimately be said to be personal which pertain to the assessee's
person.
In other words. an intimate connection between the effects
and the person of the assessee must be shown to exist to render them
F
''personal eff1~ts''.
The enumeration of articles like wearing apparel, Jewellery, and
furniture mentioned by way of illustrations in the above quoted definition of "personal effects" also shows that the Legislature intended
only those articles to be included in the definition which were intimately and commonly used by the assessee.
G
The meaning assigned to the expression "personal
effects"
in
various dictionaries also lends support ·to this view.
In the Unabridged Edition of the Random House Dictionary of the English Language at page 1075, the expression is given the following meaning :-
"Personal effects,
privately owned articles
consisting
chiefly of clothing, toilet items etc. for intimate use by an
individual".
(I) 77 I.T.R. 505.
H
426
SUPREME COURT REPORTS
[1976] 3 s.c.R.
A
In Black's Law Dictionary, Fourth Edition at Page 1301, the
expression is assigned the following meaning :
"Personal effects.
Articles associated
with person, as
property having more or less intimate relation to person of
possessor;"
\
B
c
D
E
F
G
In Cyclopedic Law Dictionary, Third Edition, at page 832, the
expression "personal effects" withont qualifying words is interpreted to
include generally such tangible property as is worn or carried about
the person.
In 'Words and Phrases' (Permanent Edition), Volume 32 at page
277 it is stated that the words "personal effects" when used without
qualification,, generally include such tangible property as is worn or
carried about the person, or to designate articles associated with the
person.
At another place at the same page, it is stated that the words
"personal effects" are used t9 designate articles assocfated with person,
as property havin~ 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 ]Jars 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 Ashtmi Day of 'Sharadh Pakh' for Maha
Lakshmi Puja and for worship on the occasion of Diwali festival cannot also be designated as effects meant for persona! 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 this
guardian to the Banks for sale.
The language of section 5(l)(viii) of the Wealth Tax Act, 1957
which is pari materia with the definition of the expression "personal
effects" as given in section 2 ( 4 A) (ii) of the Act is also helpful in construina the latter provision.
That provision runs as follows :-
"5. (!) Subject to the provisions of sub-section (1-A),
wealth-tax shall not be p_ayable by an assessee in respect of
the following assets, and such assets shall not be included in
the net wealth of the assessee.
·
(viii) furniture, household utensils, wearing
apparel,
provisions and other articles intended for the personal or
household use of the assessee butl not including jewellery;"
H
In G. S. Poddar v. The Commissioner of Wealth Tax, Bombay
City-11( 1) where the assessee at the time of his appointment in the year
(1) J.L.R. [1965] Born. 1062.
•
I
•
HEMANI SINGHJI V. C.I.T. (Jaswant Singh, J.)
42 7
1945 as a Justice oi the Peace was presented with two gold
casA
kets, ;i go.ld tray,, two gold glasses, a gold cup, saucer and spoons, and
photo frames as souvenirs by the dealers and brokers in cloth with
wliooe business he was connected and he kept these articles in a glass
~how case for display in his drawing room and in assessment year
1959-60 daimed exemption in respect of these articles
under the
above quoted provision i.e. under section 5(l)(viii) of the Wealth
Tax Act, 1957, it was held that merely because the gold ca_skcts were
B
kept in tht: show case did not make them part of the furniture and the
rest of tht• articles could not be considered to be household utensils
as that expression did not embrace within
its sweep gold
articles
meant for ornamental use for special occasions but meant household
articles which were normally, ordinarily, and _commonly so used. It
was further held in this case that the use as a decoration in the drawing
room which is only calculated to give a pride of possession is not conC
templated by the exemption and that the personal use which is contemplated by the exemption is the use of like nature as the use of
other items mentioned in the clause,
namely, furniture,
household
utensils, wearing apparel and provisions. It was further held in that
case that the expression "intended for personal or household use"
did
not
mean capable of being intended
for
personal
or
household use.
It meant normally, commonly, or ordinarily intended
D
for personal or household use.
This in our opinion is the true concept of the expression "personal use".
It ir. also significant that no exemption on behalf of the assessee
was claimed in respect of the aforesaid effects under the aforesaid provision of th(' Wealth-Tax Act.
The decision of this Court in Commissioner of Wealth Tax, Gujarat v. Arundhati Balkrishna (supra) on which strong reliance has been
placed by Mr. Desai is of no assistance to the appellant as the point
now sought to be agitated before us was never canvassed or considered
in that case.
We are, therefore,, of the considered view that the aforesaid articles
were capital assets and not personal effects as contended on behalf of
the assessee-appe!lant and as such could not be exduded while computing the gaim.
For the foregoing reasons, we do not find any merit in this appeal
which is hereby dismissed with costs.
V.P.S.
Appeal dismissed.
E
F