LAKSHMISAGAR REDDY SMT Vs. CONTROLLER OF ESTATE DUTY

JUDGEMENT

(1.) THIS is a reference under Section 64(1) of the Estate Duty Act, 1953 (hereinafter referred to as "the Act"), at the instance of the accountable person, by the Income-tax Appellate Tribunal, Hyderabad Bench, for the opinion of this court on the following question of law :

(2.) THE material facts as disclosed from the statement of case may briefly be stated: THE accountable person's husband, N. Vidyasagar Reddy, a captain in the Indian Airlines Corporation, died in an air accident. THE Indian Airlines Corporation (employer) paid to the deceased captain's wife (applicant herein) a sum of'Rs. 91,586 which included a sum of Rs. 74,960 towards compensation under Rule 73 of the Indian Airlines Corporation Employees Service Rules and Establishment Orders. THE accountable person claimed exemption in respect of the compensation amount of Rs. 74,960 on the ground that the same was not property that passed on to her on the death of her husband since the deceased had no vested or contingent interest in it. Rejecting the claim of the accountable person and relying upon the decision of the Delhi High Court in CED v. A. T. Sahani , the Asst. Controller included the sum of Rs. 74,960 in the estate of the deceased. THE appeals by the accountable person to the Appellate Controller and the Income-tax Appellate Tribunal were without success. Hence this reference.

(3.) 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 captain within the meaning of Section 5(1) of the Act or it is property which is deemed to pass on his death under Section 6 of the Act.