Deceased’s Income Tax Returns Can Be Considered For Computing His Annual Income In Motor Accident Compensation Claim Cases : Supreme Court

The Supreme Court observed that the Income Tax Return of a deceased can be considered for computing his annual income in Motor Accident Compensation Claim cases.

In this case, the claimants filed the Income Tax returns of the deceased before the Court which showed that the total income of deceased is Rs.1,18,261/-, approx. Rs.9855/- per month. The MACT ignored it on the ground that neither any ITR before 2009-2010 nor any other document with regard to the income of the deceased was filed. It thus fixed his income at Rs.4000/- per month ie, Rs.48,000/- per year. In appeal, the High Court also refused to consider ITR and assessed the income of the deceased as Rs.5,000/- per month.

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Rejecting this approach, the Apex Court bench of Justices Krishna Murari and Bela M. Trivedi observed:

“The Trial Court and the Court of Appeal both committed a serious error in assessing the income of the deceased by ignoring the Income Tax Return of the Deceased. The appellants filed the Income Tax Return (2009-2010) of the deceased which reflects the annual income of the deceased to be Rs.1,18,261/-, approximately Rs.9,855/- per month.This Court in Malarvizhi & Ors.(Supra) reaffirmed that the Income Tax Return is a statutory document to be relied upon, where available, for calculation of annual income..”

It therefore fixed the annual income of the deceased at Rs.1,18,261/-, approx. Rs.9,855/- per month. The court added that the provisions of the Motor Vehicle Act give utmost importance to the concept of “fair and just” compensation.

“Section 168 of the MV Law deals with the concept of “just compensation” which should be determined on the basis of fairness, reasonableness and fairness. Although such a determination can never be arithmetically precise or perfect, an effort should be made by the court. to award fair and just compensation regardless of the amount claimed by the applicant/s“, it added.

Allowing the appeal, the bench said that the total compensation payable to the claimant is Rs.25,91,388/-.

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Case details

Anjali vs Lokendra Rathod | 2022 LiveLaw (SC) 1012 | CA 9014 OF 2022 | 6 December 2022 | Justices Krishna Murari and Bela M. Trivedi

Headnotes

Motor Accident Compensation Claims – An Income Tax Return is a legal document that is relied upon, where available, for computing a deceased’s annual income. (Paragraph 9)

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Motor Vehicles Act, 1988; Section 168 – Concept of “just compensation” which should be determined on the foundation of fairness, prudence and fairness – Although such determination can never be arithmetically precise or perfect, an effort should be made by the court to award fair and just compensation regardless of the amount. asserted by the applicant/s. (Paragraph 10)

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