COMMISSIONER OF INCOME TAX vs. SAFETAG INTERNATIONAL INDIA PVT LTD

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ITA/355/2010HC DelhiDLHC01189938200903 February 2011Bench: HON'BLE MR. JUSTICE A.K.SIKRI,HON'BLE MR. JUSTICE M.L. MEHTA3 pages
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What did the High Court hold?

The Tribunal erred in using a multiplier of 16 instead of 15 and in not deducting income tax. The compensation was recalculated accordingly, leading to a reduction in the awarded amount.

What were the facts?

The appellant, an insurance company, sought a reduction in the compensation awarded for the death of Shri Brijender Shekhar Shukla in an accident. The grounds for appeal were the use of an incorrect multiplier and the failure to deduct income tax when computing loss of dependency.

What were the issues?

Whether the correct multiplier was applied and if income tax should have been deducted in the calculation of loss of dependency for compensation.

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MAC APP 355/2010

Page 1 of 3 * IN THE HIGH COURT OF DELHI AT NEW DELHI

Decided on: 13th March, 2012

+ MAC APP. No. 355/2010

NEW INDIA ASSURANCE CO LTD ..... Appellant

Through: Mr. Kanwal Choudhary, Advocate

versus

ARCHANA SHUKLA & ORS ..... Respondent

Through: Ms. Shalinee, Advocate for

respondents No. 1 to 5.

CORAM:

HON'BLE MR. JUSTICE G.P.MITTAL

J U D G M E N T

G. P. MITTAL, J. (ORAL) 1. The Appellant seeks reduction of compensation of ` 50,63,504/- awarded for the death of Shri Brijender Shekhar Shukla who died in an accident which occurred on 15th March,2003. 2. The contentions raised on behalf of the Appellant are as under:- (i) That the deceased was aged 38 years. The Tribunal ought to have adopted the multiplier of 15 instead of 16 as taken by the Tribunal. (ii) The deduction towards income-tax was not made while computing the loss of the dependency.

MAC APP 355/2010

Page 2 of 3 3. The Appeal is bound to succeed on both the grounds. 4. At the same time, it has to be noticed that the deceased’s gross salary was ` 34,205/- on the date of the accident. Even if the amount paid towards entertainment allowances, washing allowance, petrol reimbursement, conveyance maintenance, telephone bills and canteen allowances is deducted, the deceased’s salary would be ` 30,610/- per month or ` 3,67,320/- annually. There was a liability of income tax amounting to ` 84,100/- thereon. On adding 50% towards future prospects (Sarla Verma (Smt.) & Ors. v. Delhi Transport Corporation & Anr., (2009) 6 SCC 12) The loss of dependency would come to ` 47,79,337/- (` 30,610/- X 12- ` 84,100/- (income tax) + 50% X 3 /4X 15 ). On adding conventional sum of ` 25,000/- towards loss of Love and Affection, ` 10,000/- each, towards Loss of Consortium, Loss of Estate and Funeral Expenses, the overall compensation comes to `48,34,337/-. 5. The overall compensation is reduced to ` 48,34,337/- from `50,63,504/-which shall carry interest @ 7% per annum, as granted by the Claims Tribunal. 6. By an order dated 16th July, 2010, 75% of the award amount was directed to be deposited by the Appellant/Insurance Company. Rest of the amount along with interest shall be deposited with the Registrar General of this Court within 30 days. The amount payable shall be apportioned and held in

MAC APP 355/2010

Page 3 of 3 Fixed Deposit in the matter as directed by the Claims Tribunal. 7. The appeal is allowed in the above terms. 8. Statutory amount shall be refunded to the Appellant/Insurance Company through its counsel.

(G.P. MITTAL) JUDGE MARCH 13, 2012 P

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