Banerjee, J. - (1.) This reference, under Section 64(1) of the Estate Duty Act, 1953, has been made in the circumstances hereinafter stated.
(2.) One Ramjiwan Saraogi died on July 13, 1955. He was, at all material times, the karta of Hindu undivided family consisting of himself, his wife and two minor sons. The share of the deceased, in the undivided family, was, as such, only one-fourth. During the lifetime of the deceased, he effected a number of insurances on his own life. All the policies were, it is said, assigned by the deceased in favour of his wife. The total amount receivable under the said policies was Rs. 2,01,036.
(3.) In computing the principal value of the estate, for the purpose of assessment of estate duty, the question arose whether the insurance money, amounting to Rs. 2,01,036, should be treated as the absolute property of the deceased or the property of the Hindu undivided family, of which the deceased was the karta. The widow of the deceased, Sm. Radha Debi Saraogi, who is the accountable person, contended that the said sum of Rs. 2,01,036 should be treated as the property of the Hindu undivided family and the one-fourth share of the deceased therein should only be included in the principal value of the estate. The Assistant Controller of Estate Duty, Jamshedpur, who was the assessing authority in this case, rejected the contention put forward by the accountable person, held that the money receivable under the insurances was the individual property of the deceased and assessed the same to duty. The reasons which weighed with the Assistant Controller were : "It is not disputed that the premium was paid out of the books of account of the Hindu undivided family. The Hindu undivided family used to debit these payments to its profit and loss account. It is obvious that the Hindu undivided family treated these payments as gift to Shri Saraogi for his personal benefit and use. He did not treat these payments as spent for acquiring an asset for the Hindu undivided family ; otherwise it would have found place in the balance-sheet and not written off every year. Insurance policies are altogether on different footing than other assets. If assets are acquired in the name of a member of the Hindu undivided family, out of the funds belonging to the Hindu undivided family, then generally these assets will form part of the estate of the Hindu undivided family to which the particular individual belongs. Moneys realised on account of insurance policies, however, will in no circumstantes, form part of the estate of the Hindu undivided family. They are entirely connected and dependent upon the life of the individual.....This is the basic difference. The individual is the absolute owner of the policies. Insurance companies recognise him as such. He can nominate anybody he likes. The nominee can even be an outsider. He can even change the former nomination. He can raise loans on those policies. The policies are thus his absolute property and can be disposed of by him in any manner he likes...... The accountable person's contention that the policies were irrevocably assigned has not been found to be correct. References were made to the various companies and it was ascertained that Smt. Radha Devi, wife of the deceased, was merely a beneficiary and the deceased had full control over the policies till the date of his death. One point is also to be noted in this connection. The way in which the deceased has nominated his wife clearly shows that he treated those policies as his personal property. The deceased had two sons who were coparceners in the Hindu undivided family with him. They were not made nominees nor was the lady made nominee as their guardian.";