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TMI Blog1981 (9) TMI 156X X X X Extracts X X X X X X X X Extracts X X X X ..... er (clause 15) : Rs. 16,200. 2. Accident insurance paid under regulation 31A of the aforesaid Regulations read with clause 49 of the aforesaid order : Rs. 60,000. 3. Ex gratia payment : Rs. 50,000. The accountable person did not include the aforesaid three sums in the return on the ground that they did not form part of the estate of the deceased. The Assistant Controller, however, held that the amounts were dutiable under sections 5 and 6 of the Estate Duty Act, 1953 ("the Act"). He relied on the decision in the case of CED v. A.T. Sahani [1970] 78 ITR 508 (Delhi) 3. The accountable person appealed to the Appellate Controller and contended that the claim of the accountable person should have been accepted. Reliance was placed on a n ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... relied on the decision in the case of Lakshmisagar Reddy. According to him, the payment of accident insurance was also discretionary inasmuch as regulation 31A says that the employer may or may not insure an employee. He pointed out that in fact the employer did not insure the life of the deceased but paid the amount out of its own funds. Once the payment of the amount is within discretion of the employer, be contended, it follows that the amount would come within the ratio of the decision of Lakshmi Sagar Reddy and would become exempt from duty. 6. As an alternative contention, Shri Mazumdar urged before us that in case the amount is held to be dutiable, then the provisions of section 34(3) would apply because the deceased never had any ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ause 50 of the aforesaid order provides for the payment of 30 times the basic pay as compensation, which is quite certain. 9. Shri M.M. Mazumdar replied that the case of Sahani is not applicable to the facts of this case because their Lordships of the Andhra Pradesh High Court have distinguished on facts the case of Sahani at page 608 of the judgment in the case of Lakshmisagar Reddy. He pointed out that the payment made in the case of Lakshmisagar Reddy was under rule 73 of the Indian Airlines Corporation which is identical with regulation 30 under which the payment was made to the deceased. Hence, he contended that the decision of the Appellate Controller was quite correct and deserved to be upheld. In the alternative, he urged that the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mpensation. It is not known whether any establishment orders like clauses 49 and 50 also existed in that case and, if so, whether they were brought to the notice of their Lordships. In any event, the case of the accountable person before us is that the two amounts under consideration were not dutiable because their payment was discretionary and that there was no obligation on the part of the employer to pay them. We have considered this argument but we do not find any force in the same. When we read regulation 31, we find that it uses the words "may pay". But, clause 50 of the establishment order categorically says that the compensation shall be paid and what is more, the amount of such compensation has also been definitely laid down to be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Respectfully following the aforesaid decision of the Andhra Pradesh High Court in the case of Lakshmisagar Reddy, we hold that both the amounts under consideration were dutiable under the Act. We, therefore, reverse the decision of the Appellate Controller on the first point and uphold his decision on the second point. 12. Coming to the alternative contention raised by the learned representative for the accountable person, we find force in the same. Section 34(3) reads as below: "34(3) Notwithstanding anything contained in sub-section (1) or sub-section (2), any property passing in which the deceased never had an interest, not being a right or debt or benefit that is treated as property by virtue of the Explanation to clause (15) of sec ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... gated to the other properties and without adding them together to form a single separate estate. 12. The only other ground in the departmental appeal states that the Appellate Controller erred in holding that the premium of Rs. 7,614 paid under the Married Women's Property Policy Act by the deceased within the statutory period of two years from his death should not be treated as dutiable. We find that the decision of the Appellate Controller is supported by the several Tribunal decisions, namely, ED Appeal No. 33/Ahd./1977-78. ED Appeal No. 17/B/1975-76 and ED Appeal No. 9/Bom./1980. In each of these cases, the Tribunal has held that the premiums of the type under consideration cannot be treated as gifts made by the deceased during his li ..... X X X X Extracts X X X X X X X X Extracts X X X X
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