Accident insurance proceeds under a double benefit policy were not treated as estate property and escaped estate duty.

Accident insurance proceeds payable only on death by accident under a double benefit life policy do not constitute property passing on death and are not includible in the principal value of the estate under the Estate Duty Act, 1953. The deceased had no transferable or ascertainable interest in the accident cover before the contingency occurred, and the fact that it formed part of a double benefit arrangement did not change its character. The accident component was therefore outside estate duty, and the amount was held not liable to be included in the deceased's estate.

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Issues: Whether the amount received under a double benefit life insurance policy, to the extent it represented accident insurance payable on death by accident, was liable to estate duty under the Estate Duty Act, 1953.

Analysis: The amount in question was payable because the deceased died in an accident during the subsistence of the policy. In the light of the Supreme Court's rulings on personal accident policies, such proceeds were treated as arising only on the happening of the contingency and not as property passing on the death of the deceased. The deceased had no transferable or ascertainable interest in such accident cover that could be brought within the principal value of the estate. The fact that the policy was part of a double benefit arrangement did not alter the character of the accident component.

Conclusion: The sum of Rs. 40,000 was not includible in the estate of the deceased and was not liable to estate duty. The question was answered in the negative, in favour of the accountable person and against the Revenue.

Ratio Decidendi: Proceeds payable only on accidental death under an accident insurance component do not constitute property passing on death and cannot be included in the principal value of the estate for estate duty.

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