A. Kalyanasundharam, Accountant Member - (1.) IN this appeal by the accountable person two main issues have been raised, which are in respect of exclusion from the estate of the deceased, the amount paid to the legal heirs on the group insurance scheme and the personal accident insurance scheme. The accountable person also raised an additional ground that Rs. 85,000 received from the Life INsurance Corporation (LIC) on account of the double accident benefit which was originally included in the estate should have been excluded. IN respect of this additional ground the prayer of the accountable person was that a detailed statement as was received from the LIC in respect of the various policies specifying the amounts paid under various heads is already in the files of the Assistant Controller and, therefore, there was no investigation that was necessary and this being purely a question of law the additional ground should be allowed and considered favourably. To the additional ground the objection of the department was that this was never raised before the Appellate Controller and should, therefore, be not allowed to be considered by the Tribunal.
(2.) On the admission of the additional ground this appears to be an afterthought by the assessee but, however, in view of the fact that the estate duty has been abolished from the statute book a sympathetic view can possibly be taken to allow this additional ground as estate duty being one time tax on the estate of the deceased a fair view is reasonable. We, therefore, allow the additional ground to be taken before us purely on sympathetic ground. The deceased late Shri H.C. Mehra died in a motor-car accident on 17-6-1976. The deceased had taken several insurance policies with the LIC which provided additional benefits on the policies in case death is caused by accidents. The total amount that was paid by the LIC was Rs. 2,02,815 which contained Rs. 85,000 representing the double accident benefit as the death was caused by accident. The deceased was an employee of Polyolefings Industries Ltd. The company had taken two policies, one with the LIC under the group insurance scheme and another with the General Insurance Co. as group personal accident insurance policy. In both these policies, the contribution towards the premium was paid by the employer. The policy so taken with the General Insurance Corporation has been filed before us shows that the policies taken by the employer and the amount was to be rooted through the employer to the legal heirs of the employees in case of the employee dying during duty by accident. The group insurance policy taken with the LIC is also on similar lines. On the death of the deceased, the LIC paid Rs. 1 lakh on the group insurance policy and the General Insurance Corporation paid Rs. 1,74,600 to the employee. These two amounts were paid to the accountable person by the employer subsequently. The claim of the accountable person in respect of the group insurance and group personal accident insurance taken by the employer was that the deceased had no interest at all on these two policies as he could not have received any benefit on these policies while he was alive. Since the deceased had no interest on these policies it could not be treated as interest passing on his death or ceasing on his death and, therefore, outside the purview of the estate duty. Alternatively the claim was that it should be treated as a separate estate. In respect of the double accident benefit received from LIC, the claim was for the first time made before us as according to the accountable person it stands in the same footing as the other two policies. The Assistant Controller rejected the claim of the accountable person. The Appellate Controller was also not inclined to provide the accountable person the relief as sought for.
(3.) BEFORE us, for the accountable person, Mr. Pramod Patni filed a very detailed paper book and he drew our attention to the Board's circular, which is at page 23 of the clarification issued on the group term insurance policy. His argument was that the amount was, in fact, voluntarily paid by the employer and it can never be treated as the deceased having any interest in such policies. He relied on several authorities which have been listed at page 45 of the paper book and also the Tribunal's decision, which is at pages 47, 49 and 52. Our attention was also drawn to the Supreme Court's decision in the case of M. Ct. Muthiah v. CED [1986] 27 Taxman 342 on the issue of the amount realised on the accident insurance policy. It was, therefore, prayed that in view of the Supreme Court's decision it would be only proper to exclude from the estate duty of the deceased Rs. 1 lakh, Rs. 1,74,600 as well as Rs. 85,000 received on account of accident benefits under the group insurance scheme, personal accident insurance scheme and the double benefit accident from the LIC. The learned departmental representative relied on the orders of the authorities below.;