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TMI Blog1977 (6) TMI 17X X X X Extracts X X X X X X X X Extracts X X X X ..... ,57,603, representing the value of the insurance policies." The question relates to the estate duty assessment of the estate of late Shri Popatlal Hargovindas Gandhi (hereinafter referred to as "the deceased "). He died on 17th December, 1954. The applicant, his son, as the accountable person, filed a statement of account before the Assistant Controller of Estate Duty, Bombay. After the statement was scrutinised and after the applicant was duly heard, the Assistant Controller determined the principal value of the estate at Rs. 2,57,603 and the estate duty payable thereon at Rs. 15,640.83. It appears that the properties, passing or deemed to pass on the death of the deceased, comprised assets of free estate as well as property passing under ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ld be aggregated to arrive at the net value of the estate liable to duty. In other words, the insurance moneys should be aggregated with the value of the free estate. Secondly, it was urged that the insurance moneys were liable to satisfy the unsatisfied debts of the free estate on the basis that the deceased had an interest till his death in the assigned as well as nominated policies, which could, therefore, be attached by his creditors. The contentions were negatived by the Board who came to the conclusion that the question was really not one of aggregation but whether under section 44 of the Act the unsatisfied debts of the free estate could be deducted from out of the value of the property passing under other titles, and it came to the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ention that the Board's decision in regard to the moneys under the nominated policies was clearly erroneous in law and according to him since the value of the property under the nominated policies was admittedly far in excess of the deficit in the free estate, the unsatisfied debts of the free estate should have been allowed to be deducted from out of the value of the nominated policies. In support of his contention he principally relied upon the well-settled distinction between an assignment of a policy and a nomination of a policy and a couple of decisions where it has been laid down that by reason of nomination effected by a policy-holder under section 39 of the Insurance Act a mere right to collect the moneys under the said policies is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... what is to be considered for the purpose of the assessment is the position immediately after the death of the deceased, when all the nominated policies became the absolute property of the wife. Under section 2(16) property passing on death means property passing immediately after death or at a period ascertainable only by reference to death. Therefore, the position immediately after the death has to be considered for the purpose of setting off the debts against the property ...... In this case it is clear that, in the course of administration, the insurance policies both assigned and the nominated ones could not have been attached for paying off the debts of the free estate. Thus, it is clear that insurance policy moneys were not liable to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or his debts. In the case of Shankar Vishvanath Vagh v. Umabai Sadashiv Waghle reported in [1913] 15 Bom LR 320, a Division Bench of this court has also taken the view that an assured does not divest himself of his beneficial interest under the policy by means of a nomination unlike in the case of an assignment in writing as provided by section 130 of the Transfer of Property Act or by signed declaration of trust as provided by section 5 of the Trusts Act, and that the policy on his death forms part of his estate. In Mahadasa Brahmamma v. Kandula Venkataramana Rao [1958] 28 Comp Cas (Ins.) 5, 7; AIR 1957 AP 757, the Andhra Pradesh High Court has held thus: " A reading of the relevant provisions of section 39 can only lead to a conclusion ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ent of the death of the assured. Unlike an assignment which is irrevocable, a nomination may, at any time, before the policy matures for payment, be cancelled or changed. In the event of the policy maturing during the lifetime of the assured, the nomination will have no effect and the policy money will, in that event, be payable to the assured. It follows that while an assignee is not merely entitled to receive but has a right to the policy money itself, a nominee is no more than a person who is competent to receive the money if the assured did not survive maturity of a policy and has no right to the money." In view of the above position in law, it is clear that even if the position is to be considered immediately upon the death of the dec ..... X X X X Extracts X X X X X X X X Extracts X X X X
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