A VARAPRASADA RAO Vs. COMMISSIONER OF INCOME TAX

JUDGEMENT

(1.) THE question referred to us for consideration under Section 27(1) of the Wealth-tax Act, 1957, is as to whether the Tribunal was right in holding that the value of annuities purchased by the assessee from the Life Insurance Corporation in respect of remuneration received by him from different producers by paying a single premium insurance is includible in the net wealth of the assessee ?

(2.) THE assessee is a film director. At his instance, the producers of various films purchased certain annuities in the Life Insurance Corporation, in respect of the remuneration payable to the assessee by paying single insurance premium. THE assessee's claim that the market value of the annuities received by him was not includible in his net wealth was rejected by the Wealth-tax Officer. Though the assessee was successful in his appeal to the Commissioner, the view of the Assessing Officer was restored on further appeal to the Tribunal by the Revenue.

(3.) THE Supreme Court in the case of CWT v. Yuvraj Amrinder Singh [1985] 156 1TR 525, after referring to that proviso to Section 5(1)(vi) rejected the submission that had been made before it that the policy of insurance referred to in Clause (vi) must mean a policy based on human life and that too where periodical premia are payable and as such an annuity on life which consists of lump sum investment followed by deferred annual or monthly payment is excluded.