1986 (9) TMI 140 - AT - Income Tax

Summary

Issues:
1. Exclusion of amounts from the estate of the deceased related to group insurance and personal accident insurance schemes.
2. Additional ground raised regarding the double accident benefit received from LIC.

Analysis:

Issue 1: Exclusion of amounts from the estate
The deceased had insurance policies with LIC providing benefits in case of death by accident. The employer had taken group insurance and personal accident insurance policies for employees, with premiums paid by the employer. The amounts received from these policies were paid to the accountable person by the employer. The claim was that the deceased had no interest in these policies during his lifetime, and thus, they should be excluded from the estate duty. The Tribunal allowed the additional ground raised by the accountable person, citing the abolition of estate duty and taking a sympathetic view.

Issue 2: Double accident benefit
The accountable person claimed that the amount received from LIC as a double accident benefit should also be excluded from the estate. The claim was supported by arguments referencing Board circulars and legal authorities. The Tribunal considered the communication from LIC regarding group term insurance policy and the taxability of amounts realized by legal heirs. The policies clearly indicated that the deceased had no beneficial interest during his lifetime, and the benefits were meant for legal heirs. The Tribunal referred to a Supreme Court judgment in a similar case, where it was held that such amounts do not form part of the estate and should be excluded from estate duty provisions.

Conclusion:
The Tribunal allowed the appeal, excluding the amounts received under the group insurance, personal accident insurance, and double accident benefit from the estate duty provisions. The decision was based on the Supreme Court ruling, Board circulars, and the nature of the insurance policies, which indicated that the deceased had no interest in the amounts received by legal heirs. The Tribunal rejected the alternative contention of treating the amounts as a separate estate, as it was deemed unnecessary based on the established legal principles.