SREI INFRASTRUCTURE FINANCE LIMITED vs. ASSISTANT COMMISSIONER OF INCOME TAX, CIRCLE-11(1), KOLKATA AND ORS

WPO/348/2021HC CalcuttaWBCHCO001573202117 January 2022Author: HON'BLE JUSTICE MD. NIZAMUDDIN9 pages
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What were the facts?

The claimant, mother of the deceased victim, filed a claim for compensation of Rs. 50,00,000/- under Section 166 of the Motor Vehicles Act, 1988, after her son died in a road accident on February 19, 2016. The victim was riding a motorcycle when it was hit from behind by an offending vehicle. The Motor Accident Claims Tribunal (MACT) awarded Rs. 16,50,000/- with interest. The claimant appealed this award, arguing that the MACT erred in determining the deceased's income and future prospects. The insurance company contended that the income tax returns should not be considered as tax was paid after the victim's death.

What did the High Court hold?

The High Court held that the income tax returns for assessment years 2014-15 and 2015-16, filed prior to the deceased's death, are statutory documents and should be relied upon to determine income, even if the tax payment was made posthumously. The Tribunal's reliance on V. Subbulakshmi was distinguished as the IT return in that case was filed after death. The Court cited Kalpanaraj vs. Tamil Nadu State Transport Corporation (2015) 2 SCC 764 and Malarvizhi and others vs. United India Insurance Company Limited and Another (2020) 4 SCC 228, emphasizing the importance of IT returns. The income from the assessment year 2015-16 (Rs. 3,60,000/-) less tax paid (Rs. 9,735/-) was taken as the actual income (Rs. 3,50,265/-). For future prospects, following National Insurance Company Limited vs. Pranay Sethi and Others (2017 ACJ 2700), 40% was applied to the annual income of the deceased, as he was 24 years old and self-employed. The total compensation was recalculated to Rs. 44,43,348/-, and the insurance company was directed to pay the balance amount of Rs. 27,93,348/- with interest.

What were the issues?

1. Whether the learned Tribunal erred in determining the income of the deceased victim? (Question of law and fact, concerning Section 166 of the Motor Vehicles Act, 1988). - Assessee's argument: The MACT erred by not considering the income tax returns for assessment years 2014-15 and 2015-16, which showed an annual income of Rs. 3,60,000/-. The income disclosed in these returns, filed prior to death, should be used. Future prospects should be calculated at 40% instead of 50%. - Revenue's argument: The income tax returns for assessment years 2014-15 and 2015-16 cannot be considered because the tax payable was deposited after the victim's death. Relied on V. Subbulakshmi and others vs. S. Lakshmi and another (2008 ACJ 936). Future prospect should be scaled down to 40%. 2. Whether the learned Tribunal erred in granting 50% of the annual income of the deceased towards future prospect? (Question of law and fact, concerning Section 166 of the Motor Vehicles Act, 1988).

Which sections of the Income-tax Act were involved?

Section 166

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26.07.

2023 IN THE HIGH COURT AT CALCUTTA Ct. no.654 CIVIL APPELLATE JURI ICTION Sl. No. 8 APPELLATE SIDE KB

,, F.M.A. 348 of 2021 with IA No. CAN 1 of 2021 Madhuchanda Roy

Vs. The Oriental Insurance Co. Ltd. & Anr. ,, Mr. Amit Ranjan Ray … For the appellant/claimant. Mr. Parimal Kumar Pahari … For the Respondent/ Ins. Co. This appeal is preferred against the judgment and award dated 20th October, 2020 passed by the learned Additional District Judge-cum-Judge, Motor Accident Claims Tribunal, 2nd Court, Asansol, Paschim Bardhaman in MAC Case No.46 of 2016 granting compensation of Rs.16,50,000/- together with interest in favour of the claimant under Section 166 of the Motor Vehicles Act, 1988. The brief fact of the case is that on 19th February, 2016 at about 10.30 P.M. while the victim was returning to his house at Purnasree Pally, Asansol from Barakar through NH-2 by riding a Motor cycle bearing reg

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