Law:

Section:

Section 14 of the Estate Duty Act, 1953 - Policies kept up for a donee - Deceased had settled certain insurance policies upon a trust and continued to pay premium even after their assignment - There policies became fully paid up in 1957 and 1959 - On 6-11-1962 deceased died - Sums receivable in respect of aforesaid policies were included by Assistant Controller in deceased's estate under section 14 on ground that these policies were wholly kept up by deceased for benefit of donees - Whether despite the fact that policies had become paid up before deceased's death it could be said to have been kept up by assured and, therefore, section 14 was attracted -Held, yes Words and phrases - Words 'its' and kept up' and 'in proportion to the premiums paid by him' occurring in section 14 of Estate Duty Act, 1953 Facts The deceased had settled on trust certain insurance policies on his life, and paid their premiums even after their assignment under the settlement. The first of the two policies became fully paid up on 22-9-1959 and the second on 1-6-1957. He died on 6-11-1962. On his death certain sums became receivable in respect of the two policies in the hands of the accountable persons. The Assistant Controller held that since the policies had been wholly kept up by the deceased for the benefit of the donees, the impugned sums passed on the deceased's death under section 14. On appeal, the Appellate Controller upheld the findings. On further appeal, the Tribunal held that since premia under two policies had ceased to be payable before the deceased's death, they could not be said to have been wholly kept up by the deceased, and, therefore, the provision of section 14 were not attracted. On reference: Held Under section 14 where a policy of life insurance is kept up by the assured for the benefit of a donee, the money received under it is deemed to pass on the assured's death. Where the policy is partially kept up by the assured for such benefit, part of the money received is deemed to so pass, and the part is determined in proportion to the premiums paid by the assured. The word 'is' is used in section 14 in conjunction with the words 'kept up'. The word 'is' refers to…

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