PINGLE MADHUSUDHAN REDDY Vs. CONTROLLER OF ESTATE DUTY

JUDGEMENT

(1.) The above three reference are made to this court under the E.D. Act, 1953 (34 of 1933) (the Act), relevant to the estate of Pingle Venkatrama Reddy, who died on 3/06/1965. The questions in the reference relate to three life insurance policies obtained by the deceased. Two of the policies relate to a company, by name, Phoenix Assurance Company (Bombay company); the third, relates to the standard Life Insurance Company (the Calcutta company). The question principally is :

(2.) The three policies the assured obtained for Rs. 50,000 each. On the Bombay policies, the assured on 13/10/1941, and, for the second time on 15/10/1981, (sic) had taken loans from the Bombay company. From the statement of facts, it is not known what sums were borrowed. On the Calcutta company policy, the assured obtained on 8/06/1933, a sum of Rs. 30,000 and on 17/11/1951, another sum of Rs. 58,000. The undischarged debts on the policies were ascertained to be 71,250. The assured, during his lifetime, on 27/09/1954, assigned interest in the policies to his seven grandchildren. The last testament of the deceased was executed on 4/02/1959, and in that, the testator directed that the undischarged debts on the insurance policies be paid from his general estate and not from the proceeds of the policies.

(3.) The accountable person submitted the return of 30/03/1973. On Mar 12/03/1975, the value of the deceaseds estate, at first, was determined in the amount of Rs. 13,51,296. This sum was varied, in the course of the proceedings, once to Rs. 12,28,010 and again re-fixed at Rs. 14,32,813. The variations were as a result of orders passed by the authorities affecting the three insurance policies. The question was, whether these policies should be aggregated for purposes of rate of duty payable under the Act, or, whether the insurance policies are to be separately assessed. Further, whether the undischarged loan amount of Rs. 71,250 be deducted from the proceeds of the policies. It is convenient to took at the subject of references from the standpoint of orders of the Appellate Tribunal for answering the questions.