Taxability of annuity deposit refund: Delhi HC followed prior binding precedent and treated the amount as income in the executor's hands.

Delhi HC considered whether refund of annuity deposit received by the executor of a deceased depositor's estate was taxable in the executor's hands under the Income-tax Act, 1961. The Court followed its earlier binding decision in the assessee's own case and held that the refund constituted income assessable in the executor's hands. It declined to refer the matter to a larger Bench, noting that the issue had already been concluded for an earlier assessment year and that the relevant statutory provision had since been omitted. The question was answered in favour of the Revenue and against the assessee.

---

---

Issues: Whether the refund of annuity deposit received by the executor of a deceased depositor's estate was income assessable in the hands of the executor under the Income-tax Act, 1961.

Analysis: The reference concerned repayments made under the annuity deposit scheme governed by Chapter XXII-A and section 280D of the Income-tax Act, 1961. The Court noted its earlier decision in the assessee's own case holding that such refund received by the executor was taxable in the executor's hands. Although a contrary view and a request for reconsideration were placed before the Court, it declined to refer the matter to a larger Bench and followed the existing decision, especially as the issue had already been concluded for an earlier assessment year and the statutory provision had since been omitted.

Conclusion: The refund of annuity deposit was held to be income assessable in the hands of the executor, and the question was answered in favour of the Revenue and against the assessee.

Ratio Decidendi: Refund of annuity deposit received by an executor of the deceased depositor's estate is taxable as income in the executor's hands where the Court follows its prior binding decision on the same question under the Income-tax Act, 1961.

---