Missing Computation Sheet No Ground To Disregard Income-Tax Returns In Motor Accident Claim: Rajasthan High Court

While enhancing the compensation under Motor Vehicles Act from around Rs. 3.5 Lakhs to around Rs. 18.5 Lakhs, the Rajasthan High Court held that absence of computation sheets, by itself, is not a sufficient ground to disregard income tax returns of the deceased.

The bench of Justice Farjand Ali observed that two successive income tax returns could also be corroborated with oral testimony of the claimants, as well as the fact that the deceased was carrying on his own business, rather than remaining without any established occupation. These circumstances did not warrant assessment of income solely based on minimum wages.

For context, the Court was hearing an appeal filed by the father of the deceased against the quantum of the compensation awarded by the Motor Accident Claims Tribunal, Bikaner.

The appellant argued that at the time of the accident, his son was 28 years old, running his own business and earning an annual income of around Rs. 1.5 lakhs. In support of this, his income tax returns of 2 successive years were submitted.

However, these returns were not considered by the Tribunal on the ground that these were not accompanied with computation sheets, and claim was decided by assessing deceased's income based on minimum wages.

After hearing the contentions, the Court observed,

“In my considered opinion, the absence of the computation sheet, by itself, was not a sufficient ground to disregard the income tax returns altogether. The returns for two successive assessment years constituted relevant documentary evidence and were required to be considered along with the oral testimony of the appellant regarding the nature of the deceased's business and earnings. The testimony also finds some support in the fact that the deceased was carrying on a business of his own rather than remaining without any established occupation. In these circumstances, the assessment of income solely on the basis of minimum wages does not adequately account for the evidence available on record.”

Furthermore, the Court also highlighted that the deceased was only 28 years old, and referred to the Supreme Court case of National Insurance Co. Ltd. v Pranay Sethi in which it was held that in case of a self-employed person, below 40 years, an additional of 40% of the established income had to be made towards future prospects.

In this light, the Court observed that the deceased was young and engaged in a continuing business activity. Hence, the possibility of growth in his earnings could not reasonably be excluded merely because he was self-employed.

Accordingly, taking into account all the factors, the compensation was enhanced by almost Rs. 15 Lakhs, making it a total of around Rs. 18.5 lakhs.