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Issues Involved:
1. Liability of Rs. 68,400 payable under a group insurance policy to estate duty. 2. Dutiability of Rs. 43,846 compensation received under the Indian Carriage by Air Act, 1934. Detailed Analysis: Issue 1: Liability of Rs. 68,400 Payable Under a Group Insurance Policy to Estate Duty The primary question was whether the sum of Rs. 68,400, payable upon the death of the deceased under a group insurance policy, was liable to estate duty. The insurance policy was taken out by the employer, Dastur & Co., for its employees. The accountable person argued that the deceased had no disposable interest in the policy, and the amount was payable at the employer's discretion, thus not dutiable under the Estate Duty Act (E.D. Act). The court examined the terms of the insurance policy and an office circular issued by Dastur & Co. The policy specified that the employer was the insured and had the exclusive right to claim payments. The circular indicated that the insurance was provided at the company's expense and applied only to permanent employees. Clause 5 of the circular stated that the benefits were ex gratia and could be withdrawn or modified at the company's discretion. The Revenue argued that the policy and circular indicated a vested right in the employees to claim the insurance benefits. The court found that the insurance policy, when read with the circular, created a right in the employees to claim the insurance amount from the employer. This right was deemed to be property which the deceased was competent to dispose of under Section 6 of the E.D. Act. The court distinguished this case from others where the payment of benefits was entirely discretionary, noting that the benefits under the insurance scheme were part of the conditions of service and not purely discretionary. The court held that the sum of Rs. 68,400 was liable to estate duty under Section 6 of the E.D. Act. Issue 2: Dutiability of Rs. 43,846 Compensation Received Under the Indian Carriage by Air Act, 1934 The second issue was whether the compensation of Rs. 43,846, received under the Indian Carriage by Air Act, 1934, was dutiable under the E.D. Act. The Tribunal had held that this amount was not property passing on the death of the deceased, as the right to compensation arose only after the death. The court referred to decisions in CED v. Kasturi Lal Jain and CED v. Smt. Motia Rani Malhotra, which held that compensation under the Carriage by Air Act accrues for the benefit of the family members and not the estate of the deceased. The court concluded that the compensation did not constitute property passing on death under Section 5 of the E.D. Act and was not liable to estate duty. Conclusion: 1. The sum of Rs. 68,400 payable under the group insurance policy was liable to estate duty under Section 6 of the E.D. Act. 2. The compensation amount of Rs. 43,846 received under the Indian Carriage by Air Act, 1934, was not dutiable under the E.D. Act.
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