1983 (9) TMI 183

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....nd had entered into a contract with the L.I.C. that in case of his accidental death, his nominee should get double that mount insured. The Asst. CED held that the cause of action was created by the deceased during his life time only and the amount was clearly dutiable under s. 5 of the ED Act. 3. The accountable person placed reliance on the decision of CED vs. Arunkumar C. Kachy (Taxation Jan., 1976 Sec. VI) (sic) in support of his contention that an amount of Rs. 60,000 as claimed on account of accidental death was exempt. The Asstt. CED relied upon the decision of Bharatkumar Manilal Dalal vs. CED (1975) 99 ITR 179 (Guj) and included the received amount in the principal value of the estate of the deceased. The accountable person being....

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.... was not entitled to get the claim from accident during his life time but his nominee or legal heirs are entitled to receive the same after his death. An amount of Rs. 60,000 became receivable by the accountable person after the death of Shri R. G. Parab. The accrual of the amount from the claim of accident has arisen after the death of the deceased. 7. The decision of the Madras High Court in the case of M.C.T. Muthiah & Anr. vs. CED (1974) 94 ITR 323 (Mad) was relied upon wherein the following observations are made: "As the deceased never had any interest during his lifetime in the money paid on death under the personal accident policy, though he was competent to dispose of the same by Will, the sum paid under the policy is not aggr....

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....e by itself. The said sub-section would not be applicable because it could not be said that the deceased has not interest in the contracts of insurance contained in the two accident policies. The deceased had a property in the nature of interest to receive payment in case of less of limb arising as a result of accident or the deceased purchased an interest for the benefit of his legal representatives in case of less of his life as result of accident. It, therefore could not be said that the deceased had never an interest in the contracts of insurance contained in the said two policies and money payable thereunder. It cannot be contended that the principal value of the property should be determined with reference to the death of the insured ....