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AI Drafter - (New and Powerful) ✕ Generate professional replies, appeals, opinions to Show Cause Notices, assessment orders, audit objections, and other legal communications using TaxTMI's AI Drafter.
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Issues: Whether the amount received under the employer-provided group personal accident insurance policy was an annuity or other interest provided by the deceased, either by himself alone or in concert or by arrangement with another person, so as to be deemed to pass on his death under the estate duty law.
Analysis: Section 15 of the Estate Duty Act, 1953 applies only where the deceased has purchased or provided the relevant annuity or interest, either alone or through concerted action or arrangement with another person. The policy in question was taken by the employer on its own volition, the premium was paid by the employer, and the employment contract did not show that the deceased was under any obligation to secure such cover or that the policy formed part of the service contract. The recital that the policy was for employees and their legal heirs did not establish that the deceased participated in creating the interest or that there was any arrangement attributable to him. The necessary nexus between the deceased and the creation of the benefit was therefore absent.
Conclusion: The amount of Rs. 65,000 was not an interest deemed to pass on the death of the deceased under Section 15 of the Estate Duty Act, 1953, and the answer was against the revenue and in favour of the assessee.
Ratio Decidendi: For estate duty purposes, a benefit arising from an employer-funded insurance policy is not deemed to pass on the employee's death unless the deceased himself provided it or participated in its creation by concert or arrangement with another person.
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