1982 (9) TMI 186 - AT - Income Tax

Summary

Issues:
1. Whether the amount received from a life insurance policy belonged to the Hindu Undivided Family (HUF) or the deceased individual.
2. Whether the share of lineal descendants in the HUF property should be included for estate duty assessment purposes.

Analysis:

Issue 1:
The deceased had a life insurance policy with premiums paid from HUF funds. The wife, as the nominee, received the assured sum on his death. The accountable person claimed the amount belonged to the HUF, citing a Madras High Court decision. The Appellate Controller agreed, considering the family's conduct and intention. The revenue appealed, arguing the intention of the parties was crucial, not just the source of premium payment. However, the Tribunal held that the policies were for the family's benefit, not just the wife and children, based on various factors, including the nominee's role. Following the Supreme Court decision in a relevant case, the appeal by the revenue was rejected.

Issue 2:
During assessment, the Asstt. Controller included the share of lineal descendants in the HUF property for estate duty calculation. The Appellate Controller, following a Madras High Court decision, deemed the relevant provision ultra vires and excluded the descendants' share. The revenue appealed, citing dissenting High Court decisions on the provision's constitutional validity. The Tribunal, considering the applicable High Court decisions and the taxable limit, upheld the Appellate Controller's decision, ruling that the provision did not apply in this case. Consequently, the appeal by the revenue was dismissed.

In conclusion, the Tribunal rejected the revenue's appeal on both issues, affirming that the insurance amount belonged to the HUF and excluding the descendants' share in the HUF property for estate duty assessment.