1983 (9) TMI 183 - AT - Income Tax

Summary

Issues:
1. Whether an amount of Rs. 60,000 claimed on account of accidental death is includible in the estate of the deceased.
2. Whether the amount claimed on account of accidental death should be treated as a separate estate by itself.

Analysis:
The accountable person, widow of the deceased, filed an appeal against the order of the Appellate CED upholding the inclusion of Rs. 60,000 in the estate of the deceased. The deceased had an agreement with LIC for double the insured amount in case of accidental death. The Asst. CED held the amount dutiable under s. 5 of the ED Act as the cause of action was created during the deceased's lifetime. The Appellate CED agreed with this view based on previous decisions, rejecting the appeal.

The accountable person argued that the amount claimed on account of accidental death should be exempt, citing a case law. The Tribunal was referred to a decision where it was held that when there are two possible views, the one favorable to the subject should be followed. The main issue revolved around whether the amount claimed became receivable only after the death of the deceased, indicating a separate estate.

The Madras High Court decision was relied upon, stating that money paid under a personal accident policy, where the deceased had no interest during his lifetime, should be treated as a separate estate. The department relied on a Gujarat High Court decision but the Tribunal held that the deceased had no interest in the money under the personal accident policy during his lifetime, thus should be treated as a separate estate.

Referring to a Bombay High Court decision, it was pointed out that the accountable person could claim to treat the amount from the accident as an estate by itself under s. 34(3) of the ED Act. The Tribunal concurred with this view, holding that the amount received by the accountable person after the death of her husband should be treated as a separate estate and not clubbed with the deceased's estate. The Asst. CED was directed to recompute the dutiable estate accordingly.

In conclusion, the appeal was allowed, emphasizing the treatment of the amount claimed on account of accidental death as a separate estate by itself, distinct from the deceased's estate.