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TMI Blog1986 (9) TMI 140X X X X Extracts X X X X X X X X Extracts X X X X ..... ded in the estate should have been excluded. In respect of this additional ground the prayer of the accountable person was that a detailed statement as was received from the LIC in respect of the various policies specifying the amounts paid under various heads is already in the files of the Assistant Controller and, therefore, there was no investigation that was necessary and this being purely a question of law the additional ground should be allowed and considered favourably. To the additional ground the objection of the department was that this was never raised before the Appellate Controller and should, therefore, be not allowed to be considered by the Tribunal. 2. On the admission of the additional ground this appears to be an after th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he group insurance policy and the General Insurance Corporation paid Rs. 1,74,600 to the employee. These two amounts were paid to the accountable person by the employer subsequently. The claim of the accountable person in respect of the group insurance and group personal accident insurance taken by the employer was that the deceased had no interest at all on these two policies as be could not have received any benefit on these policies while he was alive. Since the deceased had no interest on these policies it could not be treated as interest passing on his death or ceasing on his death and, therefore, outside the purview of the estate duty. Alternatively the claim was that it should be treated as a separate estate. In respect of the double ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the authorities below. 5. We have carefully considered the arguments of both the parties. The LIC had addressed a communication on the subject of group term insurance policy to which one F. No. 313/51/72-ED, dated 22-8-1974 the estate duty section of the Board issued a clarification which reads as under : "I am directed to refer to your letter PGS/711 dated the 3rd April, 1974 enclosing a copy of letter dated 22-5-1973 and to say that on the basis of the information contained in your letter, in the case of non-contributory scheme of group insurance which is not a part of the contract of service between an employer and his employees, the benefits made available to the legal representatives or heirs of the deceased would not attract estate ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... veals that the premium is calculated on the basis of the salaries as are paid to the various employees by the employer. In these policies, the employer had tried to cover himself up in respect of any liability that may be fastened on to him in case of occurrence of any accident resulting in injury or death to the employee. Under the group insurance policy though an employer has taken the policy the employee of the company is notified that his life is assured and he is required to appoint the beneficiaries, would receive the amount in case of death. In this policy the terminal date has been specified to mean the date when the employee or the member completes 60 years of age. The scheme clearly provides that the employer shall have no benefic ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dies and, therefore, it could not be held to be passing or interest ceasing on his death. The amounts are receivable by the legal heirs of the deceased by virtue of they being beneficiaries under policies or nominees under the policies. The mere fact that beneficiaries have been nominated does not mean that the deceased had any interest whatsoever during his lifetime. 6. This very issue was before their Lordships of the Supreme Court in the case of M. Ct. Muthiah. The questions that were considered by their Lordships are as under : " '1. Whether the deceased was competent to dispose of the moneys payable under the accident policy and whether the sum of Rs. 2 lakhs is includible in the principal value of the estate ? 2. If the sum of Rs. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y and irretrievably in the hands of the beneficiary or the legatee or the nominee. The death did not cause property to change hands. The fact that a person could nominate a beneficiary would not tantamount to a disposition of the property. In any event that disposition vested in the nominee or the legal representative a right in the property. It did not pass on the death of the deceased. Therefore, the High Court was not justified in including Rs. 2 lakhs in the principal value of the estate." 7. The present case before us is on all force identical with the issue as was considered by their Lordships of the Supreme Court. The question now having been squarely answered by their Lordships, respectfully following the said ruling we have only t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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