V.G. Oak, C.J. - (1.) THIS reference purports to have been made under Section 66 of the Indian Income-tax Act, 1922. The learned counsel for the parties are agreed that the case is in fact governed by the Income-tax Acts 1961. We may, therefore, dispose of the reference as one made under Section 256 of the Income-tax Act, 1961 (hereafter referred to as "the Act").
(2.) JASWANT Rai Churamani, assessee, is an individual. The assessment year is 1962-63. The accounting period ended on March 31, 1962. In the year 1962, the assessee took out an insurance policy from the Life Insurance Corporation of India. The sum assured was Rs. 25,000. The assessee had to pay five annual premiums of Rs. 4,687'50. As required under the insurance policy, the assessee paid the Corporation the sum of Rs. 4,687.50 in March, 1962. The assessee claimed rebate for the sum of Rs. 4,687 as premium paid under the insurance policy. The claim for rebate was disallowed by the Income-tax Officer. His view was upheld in appeal by the Appellate Assistant Commissioner and by the Appellate Tribunal. The Appellate Tribunal, Delhi Bench "C", has, at the request of the assessee, referred the following question of law to this court : "Whether, on the facts and in the circumstances of the case, the rebate claimed by the assessee in the sum of Rs. 4,687 in respect of the policy taken by the assessee under the caption of pure endowment assurance, without profits, is allowable under the provisions of the Indian Income-tax Act." Annexure "A" to the statement of the case is a copy of the insurance policy taken out by the assessee. Jaswant Rai was mentioned as the propose and the party whose life has been assured. The policy contained a special provision to the following effect: "If the said life assured shall die before the date of maturity while the policy is in force, the total amount of premium paid shall be returned to the person or persons entitled to them in terms of the policy." The assessee has claimed rebate under Section 87 of the Act. Section 87 permits rebate on life insurance premia, etc. Sub-section (1) of Section 87 of the Act states : ".... the assessee shall be entitled to, a deduction ..... of an amount equal to the income-tax calculated at the average rate of income- tax on the following sums, namely :-- (a) where the assessee is an individual, any sums paid in the previous year by the assessee out of his income chargeable to tax- (i) to effect or to keep in force an insurance on the life of the assessee . . . ."
(3.) THE question is whether the present case is covered by Sub-clause (i) of Clause (a) of Section 87(1) of the Act. The expression "life insurance business" has been defined in Clause (11) of Section 2 of Insurance Act, 1938 : "'Life insurance business' 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 ...." ;