Married Women's Property Act trust principle excludes gift element in policy proceeds, so no gift-tax arose.

An insurance policy effected under section 6 of the Married Women's Property Act, 1874 for the benefit of the assessee's son was treated as creating a trust, with the assessee's wife named as trustee. Such a policy, when taken for the benefit of the wife and children, operates outside the assessee's control and the policy proceeds are intended for the beneficiary. On that basis, the amount received under the policy was not a transfer of property by the assessee and lacked the element of gift. No gift-tax was therefore leviable on the receipt, and the assessee's claim was accepted.

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Issues: Whether the insurance policy taken under the Married Women's Property Act, 1874 for the benefit of the assessee's son created a trust so that the amount received under the policy did not constitute a taxable gift by the assessee.

Analysis: The policy was effected under section 6 of the Married Women's Property Act, 1874 for the benefit of the assessee's son, with the assessee's wife named as trustee. A policy taken for the benefit of the wife and children falls within section 6 and operates as a trust. Once such a trust is created, the policy is not under the control of the assessee and the amount received under it is meant to be passed on to the beneficiary. On that footing, the receipt by the assessee was not a transfer of property by him and the element of gift was absent.

Conclusion: No gift arose from the policy amount received by the assessee, and no gift-tax was leviable; the assessee's claim was correctly accepted.

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