TMI Blog1984 (12) TMI 121X X X X Extracts X X X X X X X X Extracts X X X X ..... Life Insurance Policy should be treated as a separate estate under s. 34(iii) of ED Act as the deceased never had any interest in this and it should be taxed separately. The deceased in this case is one Smt. Mohini Devi. She died on 9th May, 1978. The maturity value of the L.I.P. taken by her, namely, Rs. 44,213 was taken as part of her estate and the value of her estate was determined at Rs. 1,67,362 by the Asstt. CED as per his assessment order dt. 7th Feb., 1980, completed under s. 58(iii) of the ED Act. 2. Aggrieved against the said order, the accountable person came in appeal before the Appellate CED. Originally he claimed only an exemption Rs. 5000 in respect of an amount received on account of L.I.C. Premium under s. 33(1)(h) of t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r value is usually obtained from the paid up value by applying a percentage factor. If is the contention of the assessee in the said note that only the surrender value of the policy should be included in the estate of the deceased. So also it is the contention of the assessee that the maturity value of the LIP policy accrued only to the legal heir of the deceased after the death of the deceased and as such the entire property can never be said to have been passed on the date of death of the deceased as the maturity value was not in existence at the time of the death of became receivable only after the death of the deceased. Even at the time of hearing before us, this argument was pressed into service by Shri S. Goyal and Shri R. L. Goyal, t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... wholly kept up by the deceased, the money received under it forms part of his estate. He also invited our attention to p. 474 of the commentary on Estate Duty by Nanavati, 3rd Edn., where it is held that the words "at the time of the deceased's death' appearing in s. 36 of the Estate Duty Act mean "at the moment immediately after the deceased's death". It is the death which is the cause of passing of the property and the cause must be considered to precede the effect. Ultimately, he also relied upon the Gujarat High Court decision reported in Bharatkumar Manilal vs. CED (1975) 99 ITR 179 (Guj) were especially the arguments sought to be advanced on behalf of the accountable person were repelled by the Gujarat High Court, as under: "The le ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cited with approval the dicta in In re Magan that the death in contemplation of law must precede the passing, and in In re Smith, that it is only when the person in question, that "it is only when the person in question has expired, after the last breath has left the body that the property posses and the liability to estate duty arises". In that view of the position now settled by this decision of the House of Lords, it must be held that the valuation must be ascertained on the date immediately succeeding the date of the death which in the present case, would be the aforesaid two sums sought to included by the Revenue in the estate of the deceased." Thus having considered both the arguments, we are of the opinion that the appeal preferre ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of hers. In fact upon the death of the deceased, all that the wife got under the nomination was a right to receive the monies from the Insurance Company and the monies under the nominated policies continued to be the property of the estate of the deceased, clearly liable to be attached by creditors for satisfaction of their debts. In other words to the extent of nine policies which had been nominated by the deceased in favour of his wife, the money there under were liable to satisfy the unsatisfied debts of the free estate and the sense the said insurance moneys really formed part of the free estate of the deceased and not property deemed to pass under other titles." Therefore, it can be seen that the above is a clear authority for the pr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e decisions, cited on behalf of the accountable person really help him. In the Andhra Pradesh High Court decision in the case of Smt. Lakshmisagar Reddy vs. CED, Hyderabad (1980) 123 ITR 601 (AP) it is held that under four circumstances or instances, the provisions of s. 5(1) of the ED Act, 1953 applied: (i) The property must be in existence at any time before the death of the deceased; (ii) The deceased must have a beneficial interest be it in praesenti or contingent in the property; (iii) The deceased must be in possession and control, be it actual, constructive or beneficial of the property and; (iv) The deceased must have power to dispose of such property. Now applying these tests to the facts of the present case of them apply ..... X X X X Extracts X X X X X X X X Extracts X X X X
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