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TMI Blog1983 (12) TMI 141X X X X Extracts X X X X X X X X Extracts X X X X ..... ion 39 of the Insurance Act, 1938. On 16-2-1958, he made a will bequeathing the life insurance amount and company shares absolutely to his wife. By the same will, he bequeathed the other immovable and movable properties to his wife and all his sons and daughters numbering eight absolutely and equally and stated that if there are any liabilities, his wife and children shall discharge the same with the help of his assets. The will also stated that his wife shall administer his estate after his death. After he died on 3-4-1958, his widow, i.e., the assessee claimed the insurance amount but the LIC did not immediately settle the claim. Therefore, she filed a suit O.S. No. 53 of 1961 in the Sub-Court of Salem on 3-4-1961. The suit was decreed on ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... interest accruing thereon, there was no justification for excluding such income from her total income. But, this contention of the revenue overlooks both the general law with regard to the testamentary succession as well as the clear provisions of the Income-tax Act, 1961 ('the Act') relating to the assessment of income arising in the course of testamentary succession. We must first notice that under section 39 of the Insurance Act, where a nomination has been made for the purpose of receiving the amount assured, the suit for recovery of that amount should be filed only by such nominee. But that does not mean that the amount is receivable by the nominee in his own account but it is received only on behalf of the estate of the deceased as t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e complete distribution to the beneficiaries of the estate. Sub-section (4) provides that in computing the total income of any previous year, any income of the estate distributed to a specific legatee shall be excluded but the income so excluded shall be included in the total income of that specific legatee. Therefore, the income-tax itself specifically provides that until the income is actually distributed, it shall not be assessed in the hands of the legatee, but shall be assessed only in the hands of the executor which is defined to include an administrator. 4. It was argued on behalf of the revenue that on the facts of this case, since the executor was also the sole beneficiary, it must be inferred that the very receipt of the amount ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ee that all the debts are paid which were charged on the life insurance amount also before she could appropriate the residue to herself as a specific legatee. We, therefore, find that though the amount was received by the assessee in the previous year, there is no evidence to come to the unequivocal conclusion that she received the amount as a legatee and the receipt must be taken to be only in the capacity of an administrator. In view of this finding of fact, the proviso to section 168 is attracted and insofar as this income was not distributed or applied to the benefit of specific legatee during the previous year, it could not be assessed in the hands of that specific legatee. Therefore, the order of the Commissioner (Appeals) excluding t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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