Yearly exemption for superannuation pension, not a flat ceiling, depends on the mode of payment.

Section 29A(b) of the Estate Duty Act was construed to relieve pensionary or superannuation benefits from estate duty on a yearly basis, not as a flat cap of Rs. 15,000 on the entire benefit. If the amount is paid in a lump sum, only Rs. 15,000 is exempt and the balance may be charged on its capitalised value; if payments are spread so that no year exceeds Rs. 15,000, no estate duty arises on that account. Application of this construction depends on the actual mode of payment, which required factual examination.

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Issues: Whether the exemption under section 29A(b) of the Estate Duty Act, 1953 in respect of annuity or pension from an approved superannuation fund is limited to Rs. 15,000 as a one-time exemption or applies as a yearly ceiling depending on the mode of payment.

Analysis: The provision was read in the light of its legislative purpose, namely to relieve hardship where pensionary or superannuation benefits payable to the widow or dependants of a deceased employee would otherwise attract estate duty. Reference was made to the scheme of approved superannuation funds under the Income-tax Act, 1961 and the Income-tax Rules, 1962, as well as the corresponding treatment of such benefits under the Income-tax Act and the Wealth-tax Act, to show that the relevant fund benefits are ordinarily protected from tax. On that construction, the expression "fifteen thousand rupees per annum" was held to qualify the amount payable in any one year, not to create a flat ceiling of Rs. 15,000 on the entire corpus irrespective of the payment pattern. If the amount is paid in a lump sum, only Rs. 15,000 is exempt and the balance may bear estate duty on its capitalised value; if it is paid over periods such that no year's payment exceeds Rs. 15,000, no estate duty is attracted on that account. As the terms of the fund governing payment were not before the lower authorities, the matter required factual examination for application of this construction.

Conclusion: The exemption was not confined to a single lump-sum ceiling of Rs. 15,000; the yearly limit construction was accepted, and the matter was remitted for determination of the actual mode of payment and consequential exemption.

Final Conclusion: The appeal succeeded only to the extent of the legal interpretation in favour of the accountable person, while the quantification of exemption for the balance amount remained for fresh examination by the lower authority.

Ratio Decidendi: Where a statute exempts annuity or pension from an approved superannuation fund up to a specified amount per annum, the exemption operates with reference to the amount payable in each year and not as an absolute cap on the total benefit, so the mode and periodicity of payment determine the extent of estate duty chargeability.

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