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TMI Blog1966 (10) TMI 48X X X X Extracts X X X X X X X X Extracts X X X X ..... sured was that of the assessee. The premium payable in respect of the policy was Rs. 1,925 per annum. That amount was paid as premium out of the taxable income of the assessee. In the course of the assessment for the assessment year 1960-61, the assessee claimed rebate on the insurance premium of Rs. 1,925, under the provisions of section 15(1) of the Income-tax Act, 1922 (hereinafter called the " Act "). The Income-tax Officer rejected the claim on the ground that under the said policy the life of the minor assessee had not been assured. The Appellate Assistant Commissioner agreed with the Income-tax Officer and held that the claim of the assessee was rightly rejected. The assessee took the matter in further appeal before the Appellate Tri ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... es or in respect of a contract for a deferred annuity on the life of the assessee or on the life of a wife or husband of the assessee or as a contribution to any provident fund to which the Provident Funds Act, 1925 (XIX of 1925), applies." The policy, a copy of which is annexed to the statement of the case as annexure " A ", mentions the following details : " Cash option Deferred date Date of maturity Rs. 11,693-50 11-3-65 11-3-82 --------------------------------------------------------------------------------------------------------------------------------------------------- Event on the happening of which sum On the stipulated date of maturity if the assured payable. life assured is then alive or at his prior death if it sh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... life assured shall die before the deferred date and in such event a sum of money equal to all the premiums paid without any deduction whatsoever shall become payable to the person entitled to the policy moneys. This policy shall stand cancelled also in the event of the life assured declining to adopt or failing or neglecting to adopt the policy before the deferred date, and in such event a sum of money equal to the cash option will become payable to the person entitled to the policy moneys." According to the contract of insurance the Life Insurance Corporation was liable to pay the sum assured (a) on the stipulated date of maturity, if the life assured was alive on that date, i.e., March 11, 1982, or (b) if the life assured were to die ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... act on the date of his attaining majority. The argument was stressed that the contract was made between the Life Insurance Corporation and the father of the assessee and under the terms thereof it could become the assessee's con tract only on his adopting it on his attaining majority. It was pointed out that if the assessee continued to be alive after the deferred date but failed to adopt the policy, it was the proposer who would be entitled to the cash option and not the assessee. If the assessee were to die before the deferred date the policy would stand cancelled and in that event it was the proposer and not the heirs of the assessee who would get the sums equal to the premiums paid. We are, however, of the opinion that the contract of i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... me-tax, a contract by which a sum is payable on the death of the assured within a specified period and a larger sum if he is alive at the end of the period must be held to be an insurance on life. There is no definition of " life insurance " in the Act but there is such a definition given in section 2(11) of the Insurance Act, 1938 (4 of 1938), which reads : " ' Life insurance' means the business of effecting contracts of insurance upon human life, including any contract whereby the payment of money is assured on death (except death by accident only) or the happening of any contingency dependent on human life, and any contract which is subject to payment of premiums for a term dependent on human life. . . " It should be remembered in th ..... X X X X Extracts X X X X X X X X Extracts X X X X
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