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TMI Blog1968 (9) TMI 43X X X X Extracts X X X X X X X X Extracts X X X X ..... scheme in the following manner: (1) In case the employee dies before his retirement a cash payment of a stipulated sum would be paid by his employer, M/s. Avery Co. of India (Pr.) Ltd. (2) In case he survives up to his retirement age of 55, he will be entitled to participate in a scheme for pension and he would get his pension at a stipulated figure from the date of his retirement till his death provided that in case the employee dies within 5 years of his retirement the pension would, notwithstanding such death, continue to be payable for 5 years from the date of retirement. The employee assessee contributed certain sums to that scheme. Certain other sums were contributed by the employer. The question is whether the sums contributed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... be mentioned that the employee was not required by the contract to pay anything towards the arrangement for cash payment on death, if any, before retirement. Mr. Pal, on behalf of the department, says that the employer is no insurance company and any sum paid by the employer to cover the risk of payment on death before retirement could not be taken to be a payment to "effect an insurance on life" within the meaning of section 15 of the Indian Income-tax Act. Mr. Sukumar Mitra on behalf of the assessee claims no exemption with regard to any sum contributed by the employer towards the scheme. The employee was never asked to pay any premium to any insurance company and the employee did in fact pay no premium to any insurance company. Hence ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ly, whether any sum was paid or not, Mr. Sukumar Mitra on behalf of the assessee made it clear that he does not claim any benefit with regard to any sum which was not actually paid by the assessee but which was contributed by the employer; the assessee actually paid certain sums with regard to the aforesaid scheme and this cannot be disputed. Hence, we must say that "sums were paid by the assessee" to his employer for the pension scheme. The next question is whether the payment was "in respect of a contract for a deferred annuity". Mr. Pal's submission is that the contract was not for a deferred annuity. The contract was pension and, secondly, there was not merely a contract with regard to a deferred annuity but there was further a contra ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... says here is a contract which is not a single contract for any annuity but it includes a contract for a cash payment on death before retirement as well as a contract to pay annuity for five years if the employee dies within five years of retirement. Therefore, this contract, according to Mr. Pal, is of a complex nature and the payment being with respect to such a contract, it cannot be said that the contract was exclusively for a deferred annuity which is stated to be the requirement of section 15. It is true that the contract may be considered to be two contracts, one for cash payment on death and another for a deferred annuity till death or for 5 years if death occurs in that period; even if it be two contracts, the payment for the forme ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... As we have already seen it satisfies all the requirements of a scheme for a deferred annuity, it does not matter what name is given to it nor does it matter if it also satisfies the requirement of a scheme for pension. We may refer to a decision in In re Profits and Income Insurance Company Ltd., where it was held: On the resignation of the actuary and secretary of an insurance company which, in addition to other branches of insurance business, carried on the business of ordinary life assurance, both by the issue of policies upon human life and by the granting of annuities upon human life, the directors passed a resolution granting him a pension. The company was subsequently ordered to be wound up compulsorily and the late actuary, having l ..... X X X X Extracts X X X X X X X X Extracts X X X X
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