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TMI Blog1987 (10) TMI 118X X X X Extracts X X X X X X X X Extracts X X X X ..... e and movable properties, Government bonds, company shares, bus service and connected assets are my self-acquired properties. My 'Ramajayam Motor Service' and the buses and spare parts and other assets and liabilities connected with it and permits and other rights, I leave to my wife, Saraswathi Ammal and my four sons born through her. They are entitled to enjoy them absolutely and equally. My Saraswathi Ammal get my life Insurance amounts and the company shares absolutely. Besides these, all the immovable and movable properties, money-lending assets, Government Bonds shall, after me, through this Will, go to my wife, Saraswathi Ammal and all my sons and daughters numbering eight born through her. They shall get them absolutely and equally. If there are any liabilities, my wife and children shall discharge them with the help of my assets. My mother, Veerammal, owns separate properties. Still my wife and children shall support her during her life time. My wife Saraswathi Ammal shall be guardian and manager of my minor children and shall protect the properties till they attain majority and deliver possession to them on their attaining majority. My wife Saraswathi Ammal shall collect ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e Tribunal set out the facts and came to the conclusion that the assessee could not be assessed in respect of the income from interest because there was no material to come to the unequivocal conclusion that the interest was received as a legatee. The Tribunal stated that the assessee had received it in the capacity of an executor or administrator having regard also to the provisions of s. 168 of the IT Act, 1961. In coming to this conclusion, the Tribunal had referred also to the relevant provisions of the Insurance Act, the Indian Succession Act etc. 3. Before us, the submission of the learned Departmental Representative was that under general law, the assessee was not an "administrator" because the assessee had not been appointed by a competent authority as an administrator. He also submitted that the Will did not name the assessee as an "executor". The assessee was, therefore, not a specified executor. According to him, on a reading the Will, it could not also be said that the assessee became an executor by implication in terms of the Will. He stressed that the assessee was not required to collect the assets and then distribute the debts. Merely because the assessee was calle ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e, that no value at all could be included under any circumstances. Finally, he submitted that if either of the earlier propositions was acceptable, only a heavily discounted value could be taken because it was the LIC which had denied the liability to pay and the willing buyer would not have paid anything more than 10 per cent of the amount at the highest considering the hazards of litigation etc. 5. The learned Departmental Representative countered the plea by first of all submitting that the discount had to be considered with reference to each valuation date if at all a discount was to be made. Regarding the aspect that the assessee was an executrix by implication, he stated that he had already addressed his arguments as to why this was not the correct position. Even if the assessee could be held to be an executrix by implication, he relied on a deed of partition dt. 12th Jan., 1972 executed between the assessee and her four sons who attained majority by then and their wives. He referred to a recitation in the said deed of partition that the parties had made and had agreed to make the arrangements and allotments to adjust the rights between themselves in regard to the moveable ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y a competent authority. The Will does not mention a specific "executor". The deed of partition shows that the parties to the same, namely, the assessee and her sons who had attained majority and were legatees under the Will, had considered that the assessee was the "executrix". That, of course, is not conclusive on the point as to whether the assessee could be considered "executrix" by implication. The assessee was managing the properties after the death of Shri Perianna Pillai because at that time the sons were minors in respect of certain assets. Therefore, if the terms of the Will are read as a whole, it could be construed that the assessee became the "executrix" by implication. The Tribunal, in the income-tax proceedings, apparently proceeded on this basis. That apart, with reference to the extended definition in the Explanation to s. 19A of the word "executor" as including within the meaning of that term not only "administrator" but other persons administering the estate of a deceased person", the assessee could be considered to be a person who was administering the estate, on the facts of the case in accordance with the directions in the Will of the deceased. This was the vi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... properties having been separately arrived at. But the LIC had filed an appeal which was pending in the High Court in 1972 challenging the decision of the sub-Judge directing the LIC to pay the amounts to the assessee. The compromise in this regard with the LIC was arrived at by the assessee only much later in 1974. There is, therefore, no clinching material in the absence of the parties having been examined. etc, as to whether any agreement had been arrived at regarding the final disposition of the amount payable in terms of the life insurance policies. It would appear that the final estate duty payment, though the assessment was completed much earlier, was made only as late as 26th Dec., 1974 by the assessee and this came to Rs.59,830. Therefore, we are unable to accept the plea of the Departmental Representative that on any date prior to the arriving at of the compromise which was on 30th July, 1974, it could be concluded that there was a complete distribution to the assessee as legatee of the item of property is dispute. We would, therefore, following the conclusion in income-tax proceedings which have now become final, hold that the value of the right to receive the amounts fr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... with the learned counsel for the assessee that no value at all should be taken. The policies had been taken out by the deceased. The assessee was the nominee under the policies. The assessee was the eventual legatee to whom the policy amounts were to go in terms of the Will on the death of the deceased. The Will came into operation and the assessee had a right to receive the policy amounts. Such right was property and the market value thereof had to be determined for wealth-tax purposes. Merely because the LIC disputed the claim or even refuted it, the assessee's right did not cease to be property. Such right had to be valued on each of the relevant valuation dates. In the view that we have taken, the value of such right on each of the valuation dates at 30 per cent would have come to Rs.1,18,740 or in round figures Rs.1,20,000. This would have been the value we would have upheld were we to come to the conclusion that the provisions of s. 19A were not applicable. But having held that the provisions of s.19A are applicable, as we have already held, no portion of the amount of Rs.3,95,870 is assessable in any of the, the years in the hands of the assessee as legatee. Hence the said a ..... X X X X Extracts X X X X X X X X Extracts X X X X
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