Estate duty exclusion for foreign insurance proceeds where the deceased was domiciled outside India and the property was situated abroad.

Movable property, including insurance policy proceeds, situated outside India at the time of death is excluded from estate duty under section 21(1)(b) where the deceased was not domiciled in India. Rule 8 treats monies payable under a policy of assurance or insurance as situated at the place where they are payable, or, if no place of payment is specified, at the insurer's head office. On the stated facts, the deceased was domiciled in the United States and the policy proceeds were taxed there, so the insurance amount could not be brought into the principal value of the estate in India.

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Issues: Whether insurance moneys received from a foreign insurance company were includible in the principal value of the estate of a deceased who was domiciled outside India, and whether such amount was exempt from estate duty under section 21(1)(b) of the Estate Duty Act, 1953.

Analysis: Section 21(1)(b) excludes movable property situated outside India at the time of death unless the deceased was domiciled in India. Rule 8 governs the situs of monies payable under a policy of assurance or insurance by deeming them situated at the place where they are payable, or, in the absence of such stipulation, at the insurer's head office. On the facts, the deceased was domiciled in the United States and the policy proceeds were subjected to duty there. The amount therefore answered the description of movable property situated outside India and could not be brought to charge in India.

Conclusion: The insurance amount was not includible in the principal value of the estate and was exempt from estate duty under section 21(1)(b); the questions were answered in favour of the assessee and against the Revenue.

Ratio Decidendi: Movable property, including insurance policy proceeds, situated outside India at the time of death is not chargeable to estate duty in India when the deceased was not domiciled in India, and its situs is determined by the rule governing the place of payment under the policy.

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