1982 (8) TMI 90 - AT - Income Tax

Summary

Issues:
Estate duty assessment - Inclusion of premium paid on life insurance policies in deceased's estate.

Analysis:
The appeal before the Appellate Tribunal ITAT BOMBAY-C arose from the estate duty assessment of a deceased individual who had seven life insurance policies in the names of his children. The Appellate CED added a sum to the estate on the grounds that the annual premiums paid were previously claimed by the deceased. The Accountable Person objected to this addition, stating that the deceased had no interest in the policies meant for his children. The Appellate CED found that only premiums paid by the deceased within two years of his death should be included, granting a relief of the excess amount. The revenue appealed this decision.

During the appeal, the Departmental Representative argued for the inclusion of surrender value of certain policies under section 15 of the ED Act, which the Appellate CED had not included. The representative contended that the surrender value should be part of the deceased's estate. However, the Accountable Person's representative supported the Appellate CED's decision, providing evidence to justify the exclusion of surrender value.

The Tribunal concluded that no interference was necessary with the Appellate CED's decision. It was established that the deceased had no interest in the policies taken for his daughters once they reached majority age. As per section 15 of the ED Act, the deceased had no beneficial interest in the policies at the time of his death, and therefore, the surrender value was not to be included in his estate. The Tribunal upheld the Appellate CED's order, dismissing the revenue's appeal.

In summary, the Tribunal affirmed that only premiums paid by the deceased within two years of his death were to be included in his estate, as no beneficial interest accrued to the daughters upon his death. Therefore, the surrender value of the policies was deemed inapplicable for inclusion in the deceased's estate. The appeal was ultimately dismissed, confirming the Appellate CED's decision.