Section 147 Vs deceased and legal hier - Urgent help required

Suppose Assessee has a private limited company and the company had given a loan to wife of the assessee.Now the Assessee has expired and the company has been shut down. All the assets and liabilities passed to the wife of the assesse being the legal hier of the deceased assessee

Question 1

Whether the loan amount which the wife had to pay to the company be treated as income to the wife in her assessment ?Can it be shown that the receiver and the payer are the same person now and hence no income has accrued to wife even though the company is in no existence now

Question 2

How will the insuarance amount received on life of the assesse be treated in the hands of the wife ?

Question 3

If the assessee is a life insuarance agent and is covered under group life insuarance policy of the life insuarance company then whether such amount received will also be taxable? how will gratuity be treated received on account of such life insuarance agency?

Replies (2)

Answer 1

Since the company goes into liquidation and all the amount receiived is on the basis of legal heir. None of the payment is taxable. All the reciepts are tax free including the loan to be repaid.

 

Answer 2

Insurance amount received is tax free in the hands of the Nominee

 

Answer 3

Gratuity is taxable but a certain exemption is available. Currently, i don't remember the Exemption limits of Gratuity in case of deceseased person.

Ans 1- If such amt was given initially as a loanto wife then it is in the nature of capital reciept so when it was given it has nonimpact from tax point of view...same way if that had been paid  then pricipal amt wouldnt have been charged to tax only int would hve ben taxable to assessee...but n ur case its lik lon given from 1 pocket to other pocket so in ma opinion loan is not taxable in the hands of wife.

But when all assets and liabiltities are transferred den sec 2(22) - deemed dividend is attracted as u mentioned that company is liquidated .

Ans-2 Insurance amount is also in the nature of capital ,hence its not taxable in the hands of wife.

 

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