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TMI Blog1966 (10) TMI 48X X X X Extracts X X X X X X X X Extracts X X X X ..... per annexure " A " of the statement of the case during the minority of the assessee. For these reasons We hold that this appeal must be allowed with costs of this court and of the High Court. Appeal allowed - - - - - Dated:- 14-10-1966 - Judge(s) : V. RAMASWAMY., J. C. SHAH JUDGMENT The judgment of the court was delivered by RAMASWAMI J.--This appeal is brought, by certificate, from the judgment of the High Court of Gujarat dated September 9, 1963, in Income-tax Reference No. 20 of 1962 : On June 23, 1959, a policy called " Children's Deferred Endowment Assurance" for a sum of Rs. 50,000 was issued by the Life Insurance Corporation of India. The proposer was Harjiwandas Kotecha, the father of the appellant (hereinafter called ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d that on the true interpretation of the terms of the contract, even if the minor were to be alive on the deferred date, it was the assessee's father who was entitled to receive the cash option unless the assessee adopted the contract as his own. The High Court accordingly observed that the real contracting parties were the father of the assessee and the Life Insurance Corporation and it was only under a certain contingency on the happening of which the contract was to become the contract of the assessee. Section 15(1) of the Act provides as follows : " 15. Exemption in the case of life insurances.--(1) The tax shall not be payable in respect of any sums paid by an assessee to effect an insurance on the life of the assessee or on the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... wing effect : " The life assured shall at any time after attaining majority and before the deferred date by a writing signed by him adopt this policy, agreeing to be bound by all its provisions. On such adoption by the life assured, this policy shall be deemed to be a contract between the Corporation and the life assured as the absolute owner of the policy as from the date of such adoption and the proposer or his estate shall not have any right or interest therein ....: Provided that if all the premiums due prior to the deferred date have been paid, the person entitled to the policy moneys shall have the option to apply for and receive as on the deferred date the cash option mentioned in the Schedule in entire cancellation of this pol ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion 15(1) requires is that in order to get exemption from payment of tax in respect of any sum two conditions must be satisfied, viz., (1) such sum must have been paid by the assessee himself, and (2) that such payment must have been made to effect an insurance on the life of the assessee himself. In the present case, the subject-matter of the contract is the insurance on the life of the assessee and it is not disputed that the payment of the premium was made by the assessee out of his taxable income. On behalf of the respondent Mr. Desai contended that the assessee was not entitled to the rebate under section 15(1) of the Act on the premium paid. It was pointed out that the contract of insurance provided that the assessee was not entitled ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r the deferred date, i.e., March 11, 1965. In our opinion, the insurance on the life of the assessee was the main intention of the contract and the other clauses upon which Mr. S. T. Desai relied are merely ancillary or subordinate to that main purpose. Life insurance in a broader sense comprises any contract in which one party agrees to pay a given sum upon the happening of a particular event contingent upon the duration of human life, in consideration of the immediate payment of a smaller sum or certain equivalent periodical payments by another party (Halsbury's Laws of England, third edition, volume 22, page 273.) It was held by the Court of Appeal in Gould v. Curtis that for the purpose of the statutory provisions relating to relief in ..... X X X X Extracts X X X X X X X X Extracts X X X X
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