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TMI Blog1987 (2) TMI 88X X X X Extracts X X X X X X X X Extracts X X X X ..... A) ought to have held that in the case of the appellant since the annuity does not exceed Rs. 15,000 per annum, the balance in the Superannuation Fund of the deceased amounting to Rs. 29,463 ought to be exempted totally from the estate of the deceased and is not agreeable with the properties of the deceased under section 34. 2. The deceased in this case was the member of the Calico Employees Superannuation Fund which as per the orders of the two lower authorities is an approved one. In the estate duty return, the A.P. had claimed an exemption of Rs. 29,463 being the "amount received" from the aforesaid fund. The ACED was of the view that the entire amount was to be aggregated to the estate and thereafter a rebate was to be allowed. He acc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n'ble Finance Minister in Parliament is relevant. This is as under : " Again, when a pension is given to the family of a deceased employee by Government or by some other body or out of a superannuation fund created by an employer and approved under the Income-tax Act, or out of a similar fund maintained by any of the international agencies, the capitalised value of the pension attracts Estate Duty. It is considered necessary to rectify the hardship arising in such cases by exempting such pension from Estate Duty. The loss of revenue as a result of these measures will be nominal. " 4.1 We would at this stage also reproduce the relevant portion of the Finance Bill, 1965 which reads as follows : " Sub-clause (vi) seeks to insert a new se ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 3 of 1961), to the extent to which the amount of such annuity or pension does not exceed the equivalent of fifteen thousand rupees per annum, or (ii) a superannuation or pension fund established by such international organisations as the Central Government may, by notification in the Gazette, specify in this behalf. " 5.1 The superannuation funds are dealt with in Schedule IV, Part B of the Income-tax Act, 1961. The scheme of such funds as detailed in the aforesaid Schedule has to be read with Rules 82 to 97 of the Income-tax Rules, 1962. In order to ascertain the nature of the aforesaid funds, we reproduce certain relevant clauses of the Schedule. 3(b) : the fund shall have for its sole purpose the provision of annuities for employee ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er have any lien or charge on the fund. " 5.3 We would at this stage also refer to the provisions of the other Acts to examine whether amounts in respect of the superannuation funds are exigible to Income-tax or Wealth-tax. Section 10(13) of the Income-tax Act reads as follows : " (13) Any payment from an approved superannuation fund made-- (i) on the death of a beneficiary ; or (ii) to an employee in lieu of or in commutation of an annuity on his retirement at or after a specified age or on his becoming incapacitated prior to such retirement ; or (iii) by way of refund of contributions on the death of a beneficiary ; or (iv) by way of refund of contributions to an employee on his leaving the service in connection with which t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the superannuation fund is fully exempt under the Wealth-tax Act. 5.5 We have drawn reference to the relevant provisions of the other Acts to show that the amounts pertaining to the Approved Superannuation Funds are not liable to income-tax or wealth-tax with the exception of section 10(13)(iv) of the Income-tax Act (and that also in respect of a part of the contribution). According to us the idea behind the legislation by means of which section 29A was introduced was to exempt the amounts received from Approved Superannuation Fund and such an intention would not be capable of two opinions inasmuch as none of the other Acts bring the aforesaid amount to tax. The learned CED(A) in this case has exempted a sum of Rs. 15,000 which accordi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... be liable to estate duty in case the payment in any year does not exceed Rs. 15,000. To give an example in case Rs. 29,463 is payable immediately in a lump sum, then Rs. 15,000 would be exempt as stated above and Rs. 14,463 would be liable for estate duty on its capitalised value. However, in case the sum of Rs. 29,463 is paid in 3 equal instalments over a period of 3 years, then nothing would be liable to estate duty as the payment in any one year would not exceed Rs. 15,000. According to us these are the provisions of section 29A, sub-section (b) and this is how we interpret them. 5.6 However, none of the two lower authorities have brought on record as to what were the terms and conditions of the Calico Employees' Superannuation Fund in ..... X X X X Extracts X X X X X X X X Extracts X X X X
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