Compensation – Motor Accident Claim – Dependency compensation – IT Returns cannot be the sole basis for determination of compensation under MV Act. Salary Certificate VS Income Tax Return

On 3.1.2011, innova car collided with the car of the appellant nos.1, 2 and deceased Madhuri S. Patil at Vele while travelling from Sangli to Pune met with an accident..  Madhuri S. Patil died while being taken to the hospital and the appellants suffered injuries.

The appellants claimed compensation towards dependency on the basis of salary certificate of Rs.17,03,416/- .  However, according to the Insurance Company, as per the income tax records, the annual income would come Rs.11,59,808/-.

By the judgment dated 5.9.2019, the Tribunal awarded Rs.1,31,37,171/- against the claim of Rs.3,69,20,000/-, relying on the income tax and rejected salary certificate without assigning any reasons.

HELD that the income for the purpose of income tax is to be calculated as per Sections 15 to 17 of the Income Tax Act, 1961 and the object is to arrive at the tax on such calculated income.   However, the salary as per the salary certificate is actually agreed between the employee and the employer.   There are various examples to show that actual income received would be different than the income calculated as per the IT Act.  The income computed under the IT Act is not the same as actually received by a person.   The object of compensation under MV Act is to compensate for the loss of pecuniary benefits and to mitigate hardship which is different than the object of the IT Act which has provisions to calculate taxable income for payment of tax.  Moreover, the Tribunal ought to have considered LTA,perks and benefits for arriving at compensation for loss of dependency.

Judgment dated 28.3.2024 in First Appeal No.340 of 2020 of Dr. Sunil Shankar Patil and others   Vs. Suhel Shaukat Shaikh and others.