Capital Gain on Rolex Watch

This query is : Resolved

CA. Rahul Dwivedi (Querist)
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03 September 2021 Dear Sir ,
An employer has gifted Rolex watch to employee and shown it as perquisite U/s 17(2). Employer has also paid the applicable tax on it and same is reflated as TDS in form 16 (Perquisite vale grossed up for tax purpose). Watch Invoice/warranty card is in Employee's Name. Employee want to sale the watch. Now the que. is whether capital gain will apply on that or it watch is treated as personal in nature & not the Capital Asset. Kindly advice.
If possible please share the case law
Thanks

Dhirajlal Rambhia

Dhirajlal Rambhia (Expert)
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03 September 2021 As such it will be treated as personal assets as per sec. 2(14) of IT act, unless there are any valuable diamond/s studded in it. The lifestyle of the assessee, along with no. of days of its usage also matters.