Rajasthan H.C : Whether, on the facts and in the circumstances of the case, the Tribunal is justified in holding that the gain of Rs. 11,650 resulting from the sale of jewellery, precious stones, etc., was not assessable as the business profit ?

High Court Of Rajasthan : Jaipur Bench

CIT vs. Manna Lal Nirmal Kumar Surana

Section 28(i), 45

Y.R. Meena & K.C. Sharma, JJ.

DB IT Ref. No. 9 of 1986

2nd January, 2003

Counsel Appeared :

Anuroop Singh with J.K. Singhi, for the Petitioner : J.K. Ranka with Rajkumar Yadav, for the Respondent

ORDER

BY THE COURT :

On an application filed under s. 256(1) of the IT Act, 1961, the Tribunal has referred the following question for the opinion of this Court : “Whether, on the facts and in the circumstances of the case, the Tribunal is justified in holding that the gain of Rs. 11,650 resulting from the sale of jewellery, precious stones, etc., was not assessable as the business profit ?”

The assessee HUF filed return of income on 11th Sept., 1979, declaring total income of Rs. 11,220. Notice was issued under s. 143(2) of the IT Act, 1961. The item, which has been sold was declared under the Voluntary Disclosure Scheme showing value of Rs. 4,350. The Special Bench of the Tribunal as well as Tribunal in this case found that assessee has not carried on any business in jewellery, precious stone, etc., and when the asset was declared, the item in question was treated as capital asset. Unless the asset is converted into stock-in-trade account, there is no question of treating the profit on sale of such item as business profit.

We find no infirmity in the order of Tribunal. In the result we answer the question in affirmative i.e., in favour of the assessee and against the Revenue.

Reference so made stands disposed of accordingly.

[Citation : 264 ITR 116]

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