TMI Blog1983 (11) TMI 10X X X X Extracts X X X X X X X X Extracts X X X X ..... rom the Bombay company. From the statement of facts, it is not known what sums were borrowed. On the Calcutta company policy, the assured obtained on June 8, 1933, a sum of Rs. 30,000 and on November 17, 1951, another sum of Rs. 58,000. The undischarged debts on the policies were ascertained to be Rs. 71,250. The assured, during his lifetime, on September 27, 1954, assigned interest in the policies to his seven grandchildren. The last testament of the deceased was executed on February 4, 1959, and in that, the testator directed that the undischarged debts on the insurance policies be paid from his general estate and not from the proceeds of the policies. The accountable person submitted the return on March 30, 1973. On March 12, 1975, the value of the deceased's estate, at first, was determined in the amount of Rs. 13,51,296. This sum was varied, in the course of the proceedings, once to Rs. 12,28,010 and again refixed at Rs. 14,32,813. The variations were as a result of orders passed by the authorities affecting the three insurance policies. The question was, whether these policies should be aggregated for purposes of rate of duty payable under the Act, or, whether the insurance ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... egation under s. 34 of the Act. We find it is convenient to deal with the entire subject in the three references together and indicate our answers at the end of the order. Section 34 of the Act enables aggregation of insurance policies for determining the rate of duty. To be precise, under cl. (1) of the section Whether Bombay and Calcutta policies fall within the expression, " property passing on the death of the deceased ", is the issue to be determined. The above words are defined in cl. (16) of s. 2 in the Act to state property, if passes on the death of the deceased, and if it does with reference to the date of death has to be aggregated. In s. 14 of the Act, " policies kept up for a donee " are dealt with and certain fictions are incorporated in the section as to when a policy is to be kept up; as to when a policy is deemed to pass on the death of the assured. Adverting to cl. (16) of s. 2 and s. 14 of the Act, it is argued by the accountable person, the assured had no interest in the policies for he had assigned his interest on September 27, 1954, in favour of his seven grandchildren and, therefore, proceeds of the polices, cannot be aggregated i Whereas, from the standpoi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... so as to pass on the death " to devolve on to the successors. The fifth case of air accident is in Muthiah (M.CT.) v. CED [1974] 94 ITR 323(Mad). The question in this case arose under an insurance accident policy. It was held, the passenger had no " interest " in the lifetime of the assured in the money paid to his successors. Another case in Smt. Amy. F. Antia v. Asst. CED [1983] 142 ITR 57 (Bom) relates to air accident death of a passenger where legal representatives of air-passenger were paid money under a group insurance policy taken out by the employer. The question was answered to hold, the assured was " possessed of the property " and he was held " competent to dispose of the property and on that basis that question was answered. It is seen, like questions under s. 4 of the Finance Act, 1804, arose in the United Kingdom. The question of aggregation was determined in Attorney-General v. Pearson [1924] 2 KB 375. In this case, the insurance policies were held to fall within the first part of s. 4. The test was specified to hold, whether the deceased " had no living interest in the policy ". The question thus was answered from " living interest " of policy. The word " interest ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d no discussion is necessary to show the assured had interest in the proceeds of the three policies, for in that test, the interest devolves on the legal representatives of the deceased. The history of loans and the evidence of repayments of loans also shows, the assured had " interest in the policies and such a property passed on the death of the deceased. The next question relates to the order of reopening of, assessment. The Assistant Controller of Estate Duty, in his order on August 18 (or October), 1975, states, during discussion with a representative of the Revenue, he was informed " that the correct approach or correct application of the " law was to aggregate the policies with the general estate of the deceased. This " information " led to the reopening of the assessment. The decision in Bharatkumar Manilal Dalal v. CED [1975] 99 ITR 179 (Guj) was the decision referred to and the policies were aggregated. It is argued by the accountable person, the circumstances referred to by the Assistant Controller do not constitute " information " within the meaning of s. 59 of the Act and, therefore, the confirmation order of the Tribunal was in error in accepting " the circumstances ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n order was issued by the Tribunal under s. 61 of the Act which corresponds to s. 35 of the Indian I.T. Act, 1922, and s. 254 of the I.T. Act, 1961. Section 61 of the Act enables " rectification of any mistake apparent from the record ". The analogous provisions of the I.T. Act, viz., the words, " mistake apparent on the record " in Balaram, ITO v. Volkart Brothers [1971] 82 ITR 50 (SC) were interpreted. The Supreme Court in this case left open the question of distinction in the expressions " error apparent on the face of the record " and " mistake apparent on the face of the record ". The decision shows what constitutes " mistake ". In the instant case, the evidence on record was ignored by the Tribunal and the order of the Tribunal stated that there was mistake. It is not argued that there was no evidence available on record leading to the rectification of the mistake and, therefore, we hold, s. 61 enabled the Tribunal to rectify the mistake. Following the discussion, we answer the questions referred in the three references : R.C. No. 159 of 1976: Q. Whether, on the facts and in the circumstances of the case, the Appellate Tribunal was justified in law in holding that there s ..... X X X X Extracts X X X X X X X X Extracts X X X X
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