VIJAYVARGIYA, J. - By this reference under s. 256(1) of the I. T. Act, 1961, (hereinafter referred to as "the Act"), the Income Tax Appellate Tribunal, Bombay Bench has referred the following question of law for the opinion of this court :

"Whether, on the facts and in the circumstances of the case, the heirloom jewellery constituted personal effects within the meaning of section 2(14) of the Income Tax Act, 1961, therfore, the sale thereof did not give rise to any taxable capital gain ?"

The facts giving rise to this reference, as set out in the statement of the case, are as follows :

The assessee is the ex-Ruler of the erstwhile Holkar State. The assessee was assessed as an individual and the assessment year involved is 1972-73, for which the previous year ended on March 31, 1972. During the accounting year relating to the assessment year in question, the assessee sold two items of heirloom jewellery for Rs. 13,80,001. The assessee claimed that the heirloom jewellery was exempted from the provisions of the W. T. Act by the CBR and, therefore, the sale thereof did not give rise to any taxable capital gains. The ITO negative the contention of the assessee and held that the ass