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TMI Blog1987 (2) TMI 90X X X X Extracts X X X X X X X X Extracts X X X X ..... Rs. 1,57,440 could be brought to levy under the Estate Duty Act, 1953 ('the Act'). For this purpose, the Assistant Controller examined the provisions of sections 5,6, and 7 of the Act and first of all came to the conclusions that there was no passing of property under section 5. He next ruled out section 6 by holding that the deceased was not competent to dispose of the property being a minor at the time of his death. The Assistant Controller, however, was of the opinion that the case fell within the provisions of Section 7. His reasons for doing so are as under: "In this case the deceased person though minor had an interest in the policy money, because the policy was assured in his name. On attaining the age of 18 years, he was to become ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dered as the estate of the proposer and amounts thereof to be paid to him. (4) It was only if the assured died after attaining the age of majority that the policy monies would be payable to the assured as the policies would vest in him. (5) As the assured had died prior to attaining majority there was no question of any property passing on death or being subjected to levy of estate duty. 5. The learned counsel in support of his arguments also referred to the relevant documents forming a part of his paper book. This contained the photo copies of the insurance policies as well as other connected documents. He drew our attention specifically to a letter dated 25-2-1984 on page 8 sent by the Dis. Manager of the Rajkot Branch of the LIC to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... attaining majority that the policy monies would vest in him. All these facts are borne out by the letter dated 25-2-1984 addressed by the LIC to the Assistant Controller and a copy having been placed at page 8 of the paper book. The same is reproduced as under: "With reference to your letter No. ED-1/8-12/1981-82 dated 15-2-1984 we have to inform you that the abovesaid three policies were taken on the life of Mr. Bhavesh by his father Shri Nathalal Maneklal when the son was of age 15. As per the terms and conditions of the policy contracts the policies shall vest in favour of the life assured Mr. Bhavesh on his attaining the age 18. Till that time the proposer Shri Nathalal Maneklal was the owner of the policies. Further as per the endor ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t accrues or arises by the cessor of such interest, ..." (balance portion not relevant for our purpose). 10. According to us these provisions would not apply as the deceased had absolutely no interest in the policies which could have said to cease on his death. This could have been the situation after he had attained majority and then died. 11. We would at this stage also, refer to the special clause 52A attached to and forming a part of the policies which reads as under: "To whom the sum assured payable: If the life assured attains the age of majority and if no applicable for surrendering the policy has been received from the person entitled to the policy moneys before the date on which the life assured attains majority this policy ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he within mentioned divisional office of the Corporation does not accept any responsibility or express any opinion as to its validity or legal effect." 12. A reading of these clauses itself leads to the conclusion that the deceased had no interest in the policies at least not so till he attained the age of 18 and which he never did. It has also been clearly provided in these two clauses that till the policies vested in the life assured (the present deceased) the moneys payable in respect of the policies became payable to the proposer (the accountable person) or his legal representatives. 13. In view of the detailed discussion in the preceding paras we do hold that the amount of Rs. 1,57,440 received by the father of the deceased from th ..... X X X X Extracts X X X X X X X X Extracts X X X X
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