CIT vs. HOTLINE ELECTRONICS LTD

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ITA/1073/2011HC DelhiDLHC01100687201123 December 2011Bench: HON'BLE MR. JUSTICE SANJIV KHANNA,HON'BLE MR. JUSTICE R.V.EASWAR3 pages
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What did the High Court hold?

The High Court found that the income tax calculation was erroneous and that compensation for loss of love and affection was due. The court re-computed the compensation, increasing the total amount awarded.

What were the facts?

The appellants sought enhancement of compensation for the death of Veena Bawa in an accident. The Claims Tribunal had awarded compensation, but the appellants argued that income tax was incorrectly calculated and no compensation was granted for loss of love and affection.

What were the issues?

The primary issues were the incorrect calculation of income tax on the deceased's income and the denial of compensation for loss of love and affection.

Which sections of the Income-tax Act were involved?

Not Applicable

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MAC. APP. No.1073/2011 Page 1 of 3 $~16 * IN THE HIGH COURT OF DELHI AT NEW DELHI

Date of decision:1st March, 2012

+ MAC. APP. No.1073/2011

KULDEEP SINGH BAWA & ORS. ..... Appellants Through: Mr. O.P. Mannie with Mr. Manish Maini, Advocates

Versus

TIKA RAM & ORS

..... Respondents Through: Mr. Pankaj Seth, Advocate for the Respondent No.3 Insurance Company.

CORAM:

HON'BLE MR. JUSTICE G.P.MITTAL

J U D G M E N T G. P. MITTAL, J. (ORAL)

1.

The Appellants seek enhancement of compensation of `6,54,000/- awarded for the death of Veena Bawa who died in an accident which occurred on 27.09.1994. 2. The ground of challenge is that the judgment is silent on the aspect that the Claims Tribunal erred in calculating the Income Tax. Instead of calculating the Income Tax on the income beyond `35,000/-, it deducted Income Tax @ 20% on the entire income of the deceased. It is submitted that the Appellants

MAC. APP. No.1073/2011 Page 2 of 3 were not granted any compensation under the head of loss of love and affection. 3. The Appeal must succeed. The liability of Income Tax on the income of `52,020/- for the Assessment Year 1995-96 would come to `3,400/-. On applying the principle as suggested by Sarla Verma & Ors. v. Delhi Transport Corporation & Anr, (2009) 6 SCC 121, i.e. adding 50% towards future prospects, deducting 1/3rd towards personal and living expenses and applying the multiplier of 15, the loss of dependency comes to `7,29,300/-. 4. In addition to this, the Appellants would also be entitled to a sum of `10,000/- towards loss of love and affection. 5. The compensation is re-computed as under:

S.No. Head of Compensation Granted by the Claims Tribunal Granted by this Court 1. Loss of Dependency `6,24,240/- `7,29,300/- 2. Loss of Love and Affection - `10,000/- 3. Loss of Consortium `10,000/- `10,000/- 4. Funeral Expenses `10,000/- `10,000/- 5. Loss to Estate `10,000/- `10,000/-

Total `6,54,240/- `7,69,300/-R

MAC. APP. No.1073/2011 Page 3 of 3 6. The overall compensation is thus enhanced from `6,54,240/- to `7,69,300/- which shall carry interest @ 7.5% per annum from the date of filing of the Petition till the date of payment. 7. The Respondent No.3 National Insurance Company Ltd. is directed to deposit the enhanced amount of `1,15,060/- along with interest within six weeks with the Registrar General of this Court. 8. The amount shall be equally disbursed between the three Appellants and shall be released on deposit. 9. The Appeal is allowed in above terms.

(G.P. MITTAL) JUDGE MARCH 01, 2012 pst

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