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TMI Blogwhether compensation paid by an Airlines Corporation under the Carriage by Air Act, 1934 to the heirs of a person dying in an air crash can be regarded as property passing on the death of the deceased victim for the purposes of Estate Duty Act, 1953X X X X Extracts X X X X X X X X Extracts X X X X ..... ir High Court in the cases of Controller of Estate Duty Vs. Kasturi Lal Jain and Controller of Estate Duty Vs. Mohini Devi Muju (93 of I.T.R. 435). The High Court observed that before a property could pass to the heirs of a deceased person under section 5 of the Estate Duty Act, 1953, the following conditions must be fulfilled:- (i) the property must be in the power, possession and control (actual constructive or beneficial) of the deceased; (ii) The deceased must have an interest whether in present or contingent, in the said property. (iii) The property must be in existence during the life-time of the deceased or at the time of his death; and (iv) The deceased must have power of disposition over the property. The High Court held ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . The Board are advised that in view of the use of the word 'passing' in sub-section (3) of section 34 and in view of the interpretation put upon the charging section by the aforesaid High Court, section 34(3) would also be inapplicable to such compensation. 4. It may, however be noted that moneys received under accident insurance policies are liable to estate duty under section 5 or/and section 6 and section 15 of the Estate Duty Act. In the case of Shri Bharatkumar Manilal Dalal Vs. Controller of Estate Duty (Estate Duty Reference No 1 of 1973) decided by the Gujarat High Court the deceased had purchased in July-August. 1965 a limited non-renewable policy covering certain travel accidents on scheduled airlines and also a personal accide ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e the latter had no interest whatsoever in the sums insured or in the contractual rights under the policies during the life-time of the insured. Thus, the court found that section 15 also was applicable. Further, as the deceased had a property in the nature of interest to receive payment in case of loss of limb arising as a result of accident or the deceased purchased in interest for the benefit of his legal representatives in case of loss of his life as a result of accident, it cannot be said that the deceased never had an interest in the contracts of insurance and moneys payable thereunder and, therefore, the moneys covered by the accident policies should be aggregated along with other property for the purpose of levy of duty. 5. This m ..... X X X X Extracts X X X X X X X X Extracts X X X X
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