TaxTMI 
TaxTMI 
1982 (6) TMI 157
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....nuation, he would have got nothing under this provision. He referred to, and relied in this context on the Commentaries on Estate Duty by Nanavati and of Dymond on English Duties. Aggrieved by his order, the department is in appeal. It is claimed in the grounds that the Appellate Controller should have held that the amount was includible in the principal value, in view of section 15 of the Estate Duty Act, 1953 ('the Act'). 2. The learned departmental representative in support of the appeal contended that the inclusion of the amount in the principal value of the estate is justified because the deceased was competent to dispose of the amount, on a reading of rule 33A of the General Provident Fund Rules. According to this rule, which, it is common ground is applicable in the present case, on the death of a subscriber to the general provident fund, the person entitled to receive the amount standing to the credit of the subscriber shall be paid by the Accounts Officer an additional amount equal to the average balance in the account during the three years immediately preceding the death of such subscriber, subject to certain conditions, one of which is that the additional amount so p....
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....y as such, because that came into existence, the moment after his death and was payable to the nominee or legal representatives, yet he had a right in the payment, on his death to his legal representatives, i.e., he had an interest over the payment of money and not in the money itself. Thus, he had a right to take away the right of the legal representatives to receive the money and vest it in some other person by will or by nominating the person to whom the amount should be paid. The nomination in such a case was held to be in the nature of a disposition by will. It was further held that though the property was not in existence before the death, since it came at the time of his death, the deceased was competent to dispose of the same by will and it is this power which attracts the provision and makes it property which is deemed to pass on the death of the deceased under section 6 of the Act. 3. The learned counsel for the accountable person contended that for any property to pass, or to be deemed to pass, the deceased should have an interest in it, which the deceased could not be said to have had in the present case. Reference was made and reliance placed on the decision of the ....
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....ht to receive the amount that may stand to his credit in the funds in the event of his death, before that amount has become payable, or having become payable, has not been paid. This power only extends to the payment of the amount standing to the credit of the subscriber in provident fund. It does not extend to the additional amount payable under rule 33A because the payment of such an additional amount is governed by the rule and not by any power vested in the subscriber. The fact that under the operation of the rule the amount becomes payable to the persons to whom the amount standing to the credit of the subscriber is payable, does not mean that the additional amount is payable because of the exercise of the power of nomination of the subscriber, but because of the operation of the rule. It is not, therefore, possible for us to accept the department's contention that the deceased had power of disposition in regard to the additional amount payable under rule 33A. The test is to see whether he would have nominated to receive the additional amount any person different from the person entitled to receive the balance to the credit of his account. 5. Coming to the decision relied o....
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....on of the facts and the relevant decisions noted therein, that the amount was not property which passed on death liable to estate duty under the Act. The question posed and considered for decision appears at page 604. It is stated that the crux of the problem is whether the compensation of Rs. 74,960 is or is not property that passed on to the accountable person on the death of the deceased within the meaning of section 5(1) of the Act or it is property which is deemed to pass on death under section 6. In that case, it is to be noticed that the deceased had a right to nominate a person or persons, who would be entitled to receive compensation payable by the Corporation under rule 73. The Court, however, held that the right of nominee, as stated above, cannot be equated to a right, if any, of the deceased to dispose of the compensation amount at the time of his death, that the competency to dispose of the property within the meaning of section 6 would mean the right of the deceased at the time of his death to do so with regard to such property and the deceased employee of the corporation was not competent to dispose of the compensation amount due and payable to his legal representat....