Taxability of compensation in the hands of heirs of deceased

Chintan Shah (-) (534 Points)

15 February 2010  

Please help me with the following.... pls give reference of case laws... if any

Q1. If the MD of a company and his wife have died in a disastar say terrorist attack and the company in which he was a M D pays Rs. 10 Cr. of compensation to the daughters of the MD. Would this reciept be taxable or not?? if yes under which head?

Q2 If in the above case the daughters are minor in whose hand the same will be taxable?

Q3. Also tell me if this exp of Rs. 10 Cr will be allowable in hands of company from income under PGBP. Please note that the MD was on company's business purpose when the grave incidence occured??