1984 (8) TMI 185 - AT - Income Tax

Insurance Policies Under Married Women's Property Act: Separate Treatment of Amounts

The Tribunal upheld the decision that amounts payable under different insurance policies taken under the Married Women's Property Act should be treated as ... Insurance Policies Issues:Interpretation of section 34(3) regarding aggregation of amounts payable under different insurance policies taken under the Married Women's Property Act.Analysis:The appeal before the Appellate Tribunal ITAT Nagpur involved the interpretation of section 34(3) regarding the aggregation of amounts payable under different insurance policies taken under the Married Women's Property Act. The deceased had taken three policies under the Act, with beneficiaries being his sons and wife in respect of each policy, totaling Rs. 89,230. The Assistant Controller aggregated the amounts due under the three policies and subjected them to duty as a separate unit, despite the deceased having no interest in the policies. On appeal, the Appellate Controller held that each amount payable under the policies should be treated as a separate estate and not aggregated, based on the deceased's lack of interest in the policies.The Tribunal considered the provisions of section 34(3), which state that any property passing in which the deceased never had an interest shall not be aggregated with any other property but shall be an estate by itself. The Tribunal deliberated on whether the words 'any property' encompassed only the deceased's other properties or also included amounts payable under different insurance policies. Referring to the Law and Practice of Estate Duty by V. Balasubramanian, the Tribunal highlighted that each estate in which the deceased had no interest should be treated as a separate estate, emphasizing that the absence of provisions to aggregate such estates supported this interpretation.Additionally, the Tribunal cited a judgment by the Tribunal, Bombay Bench 'D', in a similar case, where it was held that amounts payable under different policies should be treated as separate estates individually and not aggregated. The Tribunal emphasized that the language of the section precluded aggregation and favored a view favorable to the accountable person. Ultimately, the Tribunal upheld the Appellate Controller's decision, directing the amounts payable under each insurance policy taken under the Act to be treated as separate estates without aggregation.In conclusion, the Tribunal dismissed the appeal filed by the department, affirming that the amounts payable under different insurance policies taken under the Married Women's Property Act should be treated as separate estates without aggregation, in line with the provisions of section 34(3) and relevant legal interpretations.