ASSISTANT CONTROLLER OF ESTATE DUTY v. DAYABHAI SHIWABHAI PATEL
[Citation -1984-LL-0823-2]

Citation 1984-LL-0823-2
Appellant Name ASSISTANT CONTROLLER OF ESTATE DUTY
Respondent Name DAYABHAI SHIWABHAI PATEL
Court ITAT
Relevant Act Income-tax
Date of Order 23/08/1984
Judgment View Judgment
Keyword Tags appellate controller • assistant controller • accountable person • insurance policy • principal value • estate duty
Bot Summary: The interesting question that has arisen for our consideration is whether the Appellate Controller is justified in holding that the amounts payable under the different policies taken under the Married Women's Property Act, will each form a separate estate and they are not aggregable inter se under section 34. On appeal, the Appellate Controller held, that the deceased had no interest in the sums payable under the policies and the amount payable under each policy will have to be treated as a separate estate and not to be aggregated even while treating the same as a separate estate under section 34(3). The department is in appeal before us contending that, though no doubt, the amounts payable under the separate policies taken under the Married Women's Property Act, represent a separate estate, since the deceased had no interest in the same, the sums payable thereunder should be aggregated so as to form a single estate and subjected to duty. The question for consideration is, whether the amounts payable under the three different policies taken under the Married Women's Property Act, are to be aggregated so as to form a separate unit of assessment or the amount payable under each policy should be treated as a separate estate. Under the latter method, no duty will be leviable in view of the fact that the amount payable under each policy is below Rs. 50,000. The question is whether the words 'any property' would refer only to the other property of the deceased or it would also include any other property inclusive of the amounts payable under different insurance policies under the Married Women's Property Act. Having due regard to the above and respectfully following the same, we h o l d that the Appellate Controller was justified in directing the Assistant Controller to treat the amounts payable under each insurance policy taken under the Married Women's Property Act as a separate estate without aggregating them.


This appeal by revenue is against order of Appellate Controller in his Appeal No. CED(A)/79 of 1982-83, dated 25-2-1983. interesting question that has arisen for our consideration is whether Appellate Controller is justified in holding that amounts payable under different policies taken under Married Women's Property Act (totalling Rs. 89,230), will each form separate estate and, therefore, they are not aggregable inter se under section 34. 2. facts in this regard are briefly as under: deceased had taken three policies under Married Women's Property Act, 1874, beneficiaries being his sons and wife in respect of each policy. sums payable under these policies totalled to Rs. 89,230. While holding that deceased had no interest in these policies and, therefore, sums payable thereunder have to be treated as separate, estate under section 34(3), Assistant Controller, however, aggregated amounts due under three policies and subjected same to duty as separate unit. 3. On appeal, Appellate Controller held, that deceased had no interest in sums payable under policies and amount payable under each policy will have to be treated as separate estate and, therefore, not to be aggregated even while treating same as separate estate under section 34(3). 4. department is in appeal before us contending that, though no doubt, amounts payable under separate policies taken under Married Women's Property Act, represent separate estate, since deceased had no interest in same, sums payable thereunder should, however, be aggregated so as to form single estate and subjected to duty. 5. We have considered rival submissions. There is no dispute that three policies were taken under Married Women's Property Act. It is also not in dispute that deceased had no interest in same and, therefore, under provisions of section 34(3), they will form separate estate and, therefore, estate duty will be leviable in respect of same at rates applicable to principal value thereof. question for consideration is, whether amounts payable under three different policies taken under Married Women's Property Act, are to be aggregated so as to form separate unit of assessment or amount payable under each policy should be treated as separate estate. Under latter method, no duty will be leviable in view of fact that amount payable under each policy is below Rs. 50,000. In case of former, if sums payable under three policies are aggregated, duty will be leviable in view of fact that principal value would exceed maximum exemption limit. In this connection, reference to section 34(3) is quite germane to context. This section is reproduced hereunder: " Notwithstanding anything contained in sub-section (1) or sub-section (2), any property passing in which deceased never had interest, not being right or debt or benefit that is treated as property by virtue of Explanation to clause (15) of section 2, shall not be aggregated with any property, but shall be estate by itself, and estate duty shall be levied at rate or rates applicable in respect of principal value thereof. " section lays down that any property in which deceased had no interest shall not be aggregated with any other property but shall be estate by itself. question is whether words 'any property' would refer only to other property of deceased or it would also include any other property inclusive of amounts payable under different insurance policies under Married Women's Property Act. While dealing with this question, learned author, Shri V. Balasubramanian, in his Law and Practice of Estate Duty, Fourth edition, has made following observations: " Each estate in which deceased had no interest has to be treated as separate estate which would be clear from use of expression 'any property' and absence of any provision to aggregate value of all such separate estate together. question of aggregation is to be considered from point of view of deceased and not any one else. Where deceased had taken out four policies, A, B, C and D irrevocably and absolutely nominated from inception in favour of same beneficiary X, each of policies has to be considered as separate estate by itself. fact that X is beneficiary in all policies makes no difference. " We also find that while dealing with similar question, Tribunal, Bombay Bench 'D' has held as under in CED v. Mafalda Faria [1982] 1 ITD 981: " ...The question which then arises is whether two amounts should be treated as separate estate individually or taken together. On careful consideration of language of section, we are of opinion, that two amounts should be treated as separate estates individually and should not be aggregated not only with other properties but also inter se. This is because language of section clearly states that any property which comes within its provisions shall not be aggregated with 'any property' which obviously includes property which qualifies under section 34(3). Even if it is assumed for sake of argument that two reasonable interpretations are possible and that two amounts under consideration should be added together to form separate estate, we hold that view which is favourable to accountable person should be adopted vide decision of Supreme Court in case of CIT v. Vegetable Products Ltd. [1973] 88 ITR 192. Hence, we direct that two amounts under consideration should be assessed as separate estates, without either of them being aggregated to other properties and without adding them together to form single separate estate. " Having due regard to above and respectfully following same, we h o l d that Appellate Controller was justified in directing Assistant Controller to treat amounts payable under each insurance policy taken under Married Women's Property Act as separate estate without aggregating them. 6. In result, appeal filed by department stands dismissed. *** ASSISTANT CONTROLLER OF ESTATE DUTY v. DAYABHAI SHIWABHAI PATEL
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