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1998 (7) TMI 88 - SC - Income TaxWhether the amount under the settlement could be aggregated with the other estate of the deceased-settlor, formulated a test to decide when it could be said that the property was such that the deceased never had an interest in it? Held that:- Applying the test as laid down in Re Hodson's Settlement [1939] 1 All ER 196 (CA), to the present case, prior to the assignment, the deceased clearly had an interest in the life insurance policies. Even after the assignment, had the assignees disclaimed their interest in the policies, the benefit under the policies would have resulted to the deceased or his representatives. Therefore, it cannot be said that the deceased never had an interest in the life insurance policies for purposes of section 34(3) of the Estate Duty Act, 1953. The amount under the three life insurance policies is, therefore, liable to be aggregated with the general estate of the deceased. In view of the above, the other question as to whether the debts under the three policies should be paid out of the general estate of the deceased or out of the insurance money does not now survive. In the premises, we hold that the amounts under the three life insurance policies form a part of the general estate of the deceased and that the amounts under the three life insurance policies have to be aggregated with the general estate of the deceased for the purpose of determining the rate of estate duty. The appeals are, therefore, dismissed. In the circumstances, however, there will be no order as to costs.
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