Estate duty benefit requires a genuine series of periodical payments; repeated withdrawals from one account are not enough.

Withdrawals from a controlled company's current account are treated as a taxable benefit under rule 5 of the Estate Duty (Controlled Companies) Rules, 1953 only when they amount to a genuine series of periodical payments out of the company's resources. The Madras High Court held that repeated withdrawals in separate driblets from a single account do not, by themselves, constitute a periodical payment or a series of payments within the rule. On that construction, section 17 of the Estate Duty Act, 1953 could not be invoked to include the disputed sums in the dutiable estate, and the accountable person succeeded.

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Issues: Whether withdrawals from the deceased's current account with a controlled company constituted "periodical payments" and "benefits" within rule 5 of the Estate Duty (Controlled Companies) Rules, 1953 so as to attract liability under section 17 of the Estate Duty Act, 1953.

Analysis: Rule 5(1)(a) treats as a benefit only a periodical payment out of the company's resources. Rule 5(2) expands the expression "periodical payment" to include payments by way of dividend, interest, remuneration not being a single lump sum payment, and any other payment forming one of a series of payments. The Court held that the statutory emphasis is on a real series of payments, and that mere multiplicity of withdrawals from a single account does not by itself create such a series. The withdrawals in question were made in several separate driblets over time and could not be treated as a single lump sum payment or as payments forming a series within the rule.

Conclusion: The withdrawals did not constitute periodical payments or benefits under rule 5, and section 17 could not be invoked to include the disputed amount in the dutiable estate. The answer was in the affirmative in favour of the accountable person.

Ratio Decidendi: For estate duty under section 17 read with rule 5 of the Estate Duty (Controlled Companies) Rules, 1953, withdrawals from a controlled company's resources are chargeable only if they form part of a genuine series of periodical payments; mere repeated withdrawals from one account are insufficient.

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