1986 (12) TMI 20

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.... allowance and inclusion of refund was taken as nil subject to rectification under section 61 of the Act. Subsequently, the Income-tax Officer reported to the Assistant Controller of Estate Duty that refunds of Rs. 8,47,034 became payable to the deceased on account of revision of income-tax and wealth-tax assessments. Thereafter, notice under section 61 of the Estate Duty Act was issued to the accountable person to show cause why the refund was not liable to be included in the principal value of the estate left by the deceased. The accountable person filed objection contending that since the deceased had blended all his properties with the character of Hindu undivided family, no estate duty was imposable on the subsequent refunds. It was....

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....nfirming the deletion by the Appellate Controller of tax refunds payable to the deceased from the principal value of his estate liable to estate duty ?" The application was allowed. Hence, the reference. Section 2(16) deals with "property passing on the death" and includes any property passing either immediately on the death or after any interval, either certainly or contingently, and either originally or by way of substitutive limitation, and " on the death " includes " at a period ascertainable only by reference to the death ". Section 3(1)(a), (b) and (c), inter alia, provides for certain situations in which a person is deemed competent to dispose of property. Section 5 deals with the levy of estate duty. Section 6 deals with th....

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....e hands. The fact that a person can nominate a beneficiary does not amount to the disposition of a property. We are, therefore, of the opinion that to such a case, as the present, section 5 was not attracted, Hence, no estate duty was payable. No property passed on through the deceased. In M. Ct. Muthiah v. CED [1986] 161 ITR 768, the Supreme Court held (headnote): " An accident insurance policy cannot be construed as a movable property unlike a life insurance policy or an annuity because, as laid down in section 2(15) of the Estate Duty Act, 1953, it is not only necessary for the person to have property or interest in property but that interest must be in regard to a movable property and his interest should also be capable of being a....