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TMI Blog2001 (11) TMI 261X X X X Extracts X X X X X X X X Extracts X X X X ..... the Tribunal for the earlier years had held that the value of the annuity policies should not be included in the net wealth of the assessee. On being pointed out that the decision of the Bombay High Court in CWT v. Ajit alias Hamid Alikhan [1995] 215 ITR 454 was not considered and that it may be necessary to consider the same, the Hon'ble President, Income-tax Appellate Tribunal, was satisfied that the issue involves formation of a Special Bench comprising of three Members. On that basis this Special Bench is constituted by the Hon'ble President of the Tribunal, cases were posted for hearing and accordingly the parties have been heard at length. 2. The accepted fact in the instant cases is that the annuity policies represented policies is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t is an asset for the purposes of Wealth-tax Act or not. In that case, which was again a case of a film artiste, the contract between the film artiste and the producer was with regard to the payment of remuneration to the artiste in annual instalments of specified sums spread over a number of years. The purchaser took annuity policies from the L.I.C. to secure payment of mutually agreed amounts. The policy provided that it could not be surrendered nor the annuity could be commuted. The High Court considered whether the annuity policy could be termed as an asset within the meaning of section 2(e) of the Act. Section 2(e) of the Act as it stood then is reproduced below for the sake of facility "2(e) 'assets' includes property of every descr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed in the agreement, the provisions of section 2(e) of the Act were found to be attracted and on that basis the value of the right to receive annuities in future is includible in the net wealth. On that basis, the Bombay High Court upheld the view of the Tribunal in that case. 4. In the instant cases it is accepted that both the assessees are film artistes and by virtue of an agreement with the producer in satisfaction of the remuneration payable on the basis of a contract, the film producer invested in the annuity policies of L.I.C. which would pay the assessees a particular specified amount over the period of the policy. The policy further prohibits commutation as well as surrender. In the light of the amendment made to section 2(e) of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... est of the assessee could be determined and payable to the assessee and if the policy has a life of less than ten years, the extent to which it would be excluded from wealth would the right of interest in proportion of the number of years payable with reference to 10. In the instant cases, it is a case of annuity policy purchased by virtue of a contract and it is a single premium policy and it prohibits surrender of the policy or commutation of the policy. To put it in other words, all that the assessee is permitted under the policy is to receive the annual payment each year because the assessee is not a party to the contract other than being the beneficiary under the contract. Further, in order to attract the provisions of section 5(1)(vi) ..... X X X X Extracts X X X X X X X X Extracts X X X X
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