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Section 5 of the Estate Duty Act, 1953 - Property passing on death - Whether compensation received by heirs of a person after his death in air crash can not partake of his estate or form a part of his estate and it cannot be said to be his property which would pass on his death - Held, yes FACTS The legal heirs of the deceased were given certain amount as ad hoc compensation by the Indian Airlines Corporation because the deceased died in the accident while travelling as passenger of the Indian Airlines Corporation. The legal heirs claimed that this amount was exempt as this asset was not in existence at the time of death of the deceased and, therefore, it was not a property, which passed on the death of the deceased. The Assistant Controller disallowed the claim holding that when the legal heirs were paid the compensation it was directly because the right of the deceased as a fare paying passenger which was converted into the right of the deceased to receive the above compensation and, therefore, the compensation received by the legal heirs was a property which existed in the lifetime of the deceased and ceased on the death of the deceased because of his death. The Appellate Controller, however allowed the assessee is claim holding that compensation should not have been included in the value of the deceased's estate because the said compensation was not receivable by the deceased, but was receivable by his heirs in the event of his death by accident during the course of his journey by the Indian Airlines Aircraft. The Tribunal affirmed the decision of the Appellate Controller. On reference : HELD Keeping in view the provisions of section 5, section 2(15) and section 2(16), what can be charged to estate duty is that property which passed on the death of the deceased. It this was kept in view, this case presented no difficulty. The provisions of the Indian Carriage by Air Act, 1934 lead to one and only one conclusion that this Act provides compensation to the members of the deceased's family. That is, on the death of a person by an accident in an aeroplane carrier, damages by way of compensation are provided for the members of his family. In the very nature of…

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