The Commissioner of Income Tax, vs. Shri Chidipotu Sridhar,

APHC010631512016 IN THE HIGH COURT OF ANDHRA PRADESH AT AMARAVATI FRIDAY, THE TWENTIETH DAY OF JUNE TWO THOUSAND AND TWENTY FIVE PRESENT HONOURABLE SRI JUSTICE A. HARI HARANADHA SARMA MOTOR ACCIDENT CIVIL MISCELLANEOUS APPEAL No.203 of 2016 Between: 1. Rudraraju Rukmini, W/o.late Sri Venkatalakshmi Narasimha Raju, Hindu, Occ: Housewife, R/o.Vuyyurivari Meraka, Near Antarvedipalem, Sakhinetipalli - 533 251, East Godavari District. 2. Pericherla Lakshmi Yathi Rajavalli, W/o.Krishna Murthy Raju, Hindu, Occ: Housewife, R/o.Yendagandi, Undi Mandal - 534 199, West Godavari District. 3. Kosuri Krishna Veni, W/o.Sri Sampath Kumar, Hindu, Occ: Housewife, R/o.Mehdipatnam, Hyderabad. 4. Rudraraju Venkatapathi Raju, S/o.late Venkatalakshmi Narasimha Raju, Hindu, Occ: Cultivation, R/o.Vuyyurivari Meraka, Near Antarvedipalem, Sakhinetipalli - 533 251, East Godavari District. 5. Rudraraju Venkata Satyanarayana Raju, S/o.late Venkatalakshmi Narasimha Raju, Hindu, Occ: Cultivation, R/o.Vuyyurivari Meraka, Near Antarvedipalem, Sakhinetipalli - 533 251, East Godavari District. ...Appellants/Petitioners AND 1. P Kondal Rao, S/o.Pothu Raju, Occ: Driver of Lorry, R/o.D.Muppavaram, Nidadavolu, West Godavari District.

HIGH COURT DATED:20/06/2025 of andh^ 2 5 JUL 2025 J"’ V ^-eSPATCVV^^ DECREE MAGMA No.203 of 2016 lx: *3' N3' ALLOWING THE MAGMA

APHC010631512016 IN THE HIGH COURT OF ANDHRA PRADESH AT AMARAVATI FRIDAY, THE TWENTIETH DAY OF JUNE TWO THOUSAND AND TWENTY FIVE PRESENT HONOURABLE SRI JUSTICE A. HARI HARANADHA SARMA MOTOR ACCIDENT CIVIL MISCELLANEOUS APPEAL No.203 of 2016 Appeal filed under Section 173 of M.V. Act, aggrieved by the Decree and Judgment dated 09.11.2015 in MVOP No.51/2013 on the file of the Court of the Motor Accidents Claims Tribunal cum District Judge, Rajahmundry, East Godavari District. Between: 1. Rudraraju Rukmini, W/o.late Sri Venkatalakshmi Narasimha Raju, Hindu, Occ: Housewife, R/o.Vuyyurivari Meraka, Near Antarvedipalem, Sakhinetipalli - 533 251, East Godavari District. 2. Pericherla Lakshmi Yathi Rajavalli, W/o.Krishna Murthy Raju, Hindu, Occ: Housewife, R/o.Yendagandi, Undi Mandal - 534 199, West Godavari District. 3. Kosuri Krishna Veni, W/o.Sri Sampath Kumar, Hindu, Occ: Housewife, R/o.Mehdipatnam, Hyderabad. 4. Rudraraju Venkatapathi Raju, S/o.late Venkatalakshmi Narasimha Raju, Hindu, Occ: Cultivation, R/o.Vuyyurivari Meraka, Near Antarvedipalem, Sakhinetipalli - 533 251, East Godavari District. 5. Rudraraju Venkata Satyanarayana Raju, S/o.late Venkatalakshmi Narasimha Raju, Hindu, Occ: Cultivation, R/o.Vuyyurivari Meraka, Near Antarvedipalem, Sakhinetipalli - 533 251, East Godavari District.

...Appellants/Petitioners AND 1. P Kondal Rao, S/o.Pothu Raju R/o.D.Muppavaram, Nidadavolu, West Godavari District. 2. Palla Pothu Raju, S/o.Gani Raju, Occ: Owner Sivaraopeta, Bhimavaram, West Godavari District. 3. The United India Insurance Company Limited, rep by its Divisional Manager, 0/o.Rajahmundery - 533 101, East Godavari District. Occ: Driver of Lorry, of Lorry, R/o.lNV ...Respondents/ Respondents (R-1 is not necessary party to this appeal) Counsel for the Appellants : Sri N Siva Reddy Counsel for Respondent No.2: None Appeared Counsel for Respondent No.3: Sri Javvaji Sarath Chandra The Court made the following;

1 THE HONOURABLE SRI JUSTICE A. HARI HARANADHA SARMA M.A.C.M.A.No.203 of 2016 JUDGMENT: I. Introduction:- This appeal is directed against the order and decree dated 09.11.2015 passed in M.V.O.P.No.51 of 2013 by the Motor Vehicles Accidents Claims Tribunal-cum-District Judge, at Rajahmundry [for short “the learned MACT], where under a claim made for awarding compensation of Rs.20,00,000/- , for the death of one Rudraraju Venkatalakshmi Narasimha Raju (hereinafter referred to as “the deceased’’) in a road traffic accident, by his legal heirs and dependents, was allowed by granting of compensation of Rs.6,31,900/-. Feeling aggrieved thereby, the present appeal is filed by the claimants. 2. Claimant No.1 is the wife, claimant Nos.2 and 3 are daughters and claimants Nos.4 and 5 are sons of the deceased. 3. Respondent No.1 is the driver and respondent No.2 is the owner, of the offending vehicle. 3^^ respondent is the Insurance Company. II. Case of the claimants, in brief, is that: 4. [i] On 25.06.2012 at about 10.00a.m., while the deceased was proceeding on his motor cycle near Chittavaram at Narsapuram road, lorry

2 bearing No. AP 20 T driven by the 1 2490 (herein after referred came in a rash causing instantaneous death. as 'the offending vehicle’) and negligent respondent, dashed against the deceased manner and [ii] The deceased was aged ‘60 attending civil constructions work, income for the claimants. The ■ Negligence of earning Rs.6,00,000/- claimants are the legal heirs , the 1‘< respondent is the cause for the the vehicle and p a., contributing his i and dependants of the deceased accident. The2"'i respondent, owner of vicariously liable for insurer, with whom the compensation of employer of the 1®* compensating the claimants. The respondent, is 3'" respondent is the i offending vehicle was insured. Claimants are entitled for Rs.20,00,000/-. 5. 1®‘ and 2"*^ respondents, the driver remained ex pa/fe before the learned and owner of the offending vehicle MACT. III. Case of thP resi [Q^ndent/lnsurance ^ny. in bripf. is that ■ 6. [i] The offending vehicle covering the period from 20.04.2012 conditions of the Insurance Policy. was insured with the to 19.04.2013 subject to respondent, compliance of [ii] Claimants shall part of the driver of the prove the pleaded accident, offending vehicle, negligence on the comjoliance of the conditions of the

3 Insurance Policy, including valid driving licence to the deceased and negligence of the deceased is the cause for the accident. [iii] Age, occupation and income of the deceased claimed by the claimants are not correct and quantum of compensation claimed is excessive. 7. On the strength of pleadings, the following issues were settled for trial by the learned MACT: 1) Whether the accident arose due to rash and negligent driving of lorry bearing No.AP 20 T 2490 by respondent, resulting death of the deceased? 2) Whether the petitioners are entitled to compensation? If so, to what amount and from whom? To what relief? 3) IV. Evidence before the learned MACT: 8. Documentary evidence:- Exhibit Description Remarks No. EX.A1 Attested copy of F.I.R. in Cr.No.79 of 2012 of Narsapuram Poirce Station Attested copy of Inquest Report. For the Claimants EX.A2 Ex.AS Attested copy of M.V. Inspector Report. Ex.A4 Attested copy of Post Mortem Report Ex.AS Attested copy of Charge Sheet in Cr.No.79/2012 of Narsapuram P.S. Original Certificate given by Jampana Constructions in favour of Sri Srinivasa Constructions run by the deceased dt.30.03.2015. Ex.AS Si

4 EX.A7 Income Tax returns filed by the deceased to the Income Tax department for the assessment year 2011-2012. Income Tax returns filed by the deceased to the Income Tax department for the assessment year 2012-2013 Ex,A8 EX.A9 Driving Licence of the deceased showing date of birth as 01.05.1951. Ex.AIO Form 16A submitted by the deceased, for the assessment year 2011-2012 (1-1-2010 to 31-12- 2010) for a sum of Rs. 1,14,553/-. From 16A submitted by the deceased for the assessment year 2012-2013 (1-1-2010 to 31-3- 2011) for sum of Rs.73,147/-. Ex.AII EX.A12 FormlOA submitted by the deceased for the assessment year 2012-2013 (from 1.4.2011 to 3.6.2011) for a sum of Rs.86,726/-. FormISA submitted by the deceased for the assessment year 2012-2013 (from 1.7.2011 to 30.9.2011) for a sum of Rs. 1,47,197/-. Form 16 A submitted by the deceased to the Income Tax Department for the assessment year 2012-2013 (from 1.10.2011 to 31.12.2011) for a sum of Rs. 1,26,225/-. ' EX.A13 EX.A14 Form 16A submitted by the deceased for the assessment year 2012-2013 for a sum of Rs. 1,79,537/-. Copy of VAT Certificate issued by Commercial Taxes Department of Govt, of A.P. in Form No.VAT 105 in favour of Sri Srinivasa Constructions. EX.A15 EX.A16 Copy of TDS deducted by Sales Tax Department in Form No.501 B paid by Jampana Constructions to the deceased Firm- Sri Srinivasa Constructions for the year 20-05-2011 relating to March 2011 for a sum of Rs. 1,82,624/-. Copy of TDS deducted by Sales Tax Department in From No.501 B paid by Jampana Constructions to the deceased Firm Sri Srinivasa Constructions for the year 20-04-2012 relating to March 2012, for a sum of Rs.3,04,731/- EX.A17 EX.A18 For the respondent Copy of Insurance Policy NO.1506053112P163237387 bearing Ex.B-1

5 9. Oral Evidence:- P.W.1: Rudraraju Rukmini 1. Claimant No. 1/wife of the deceased P.W.2: Valavala Srinivas Eye witness to the accident. PW.3;Pulipaka Suresh Charted Account, who filed I.T returns for the deceased None examined for the respondents V. Findings of the learned MACT: 10. [i] Accident is not in dispute. PW.2, an eye witness to the accident stated about the negligence. 1®* respondent, driver of the offending vehicle remained ex parte. No other eye witness is examined. Therefore, the evidence is sufficient to hold the negligent driving of the offending vehicle. Claimant No.1 is the wife, claimants 2 and 3 are the daughters claimants 4 and 5 are sons, their relationship is not denied. Since the claimants lost love and affection and 1®* claimant lost [iii] dependency, all the claimants are entitled for compensation^ [iv] Ownership of the 2"^ respondent over the offending vehicle and the same being insured with the 3'^' respondent are not in dispute. Negligence of the 1®‘ respondent is the cause for the accident. Therefore, all the respondents are jointly and severally liable to pay compensation.

6 [V] Income Tax returns under Ex.A7 and Ex.A8 and the PW. 3/Charted Accountant, evidence of would show the Rs. 10,89,899/- as per Ex.A7, but Rs.23,10,397/- as per Ex.A8. gross total income at [Vi] PW.1 stated that books of accounts are not maintained by her husband. Ex.AS/ presented after death of the deceased, is not supported by any books of accounts, so it cannot be considered. [vii] As per the evidence of PW.3, 8% of the turnover would be treated income, if the annual turnover is below Rs.60,00,000/-. Rs. 10,89,890/- comes to Rs.87,192/-. as 8% of [viii] There is no financial loss to family, because continued by the family, is the contention of the Insurance same the business is Company, but the is not acceptable. Since the age of the deceased is ‘65’, no future prospects can be assessed. The deduction of Rs.87,192/- at 1/3'"^ towards personal expenditure, the contribution to the family comes to Rs.58,128/-. Multiplier applicable is ‘7 then the loss of dependency [Rs.58,128x7] Rs.4,06,896/- and Rs.1,00 000/- comes to towards loss of estate, Rs.25,000/- towards funeral expenditure, in all they are entitled, Rs.6,31,900/-.

7 VI. Arguments in the appeal: For the appellant-claimants: 11. [i] Learned MACT erred in taking the age at ‘65’ and the multiplier T. Learned MACT erred in taking the income notionally for the year 2011-2012 at 8% of gross turn over. Learned Tribunal erred in deducting 1/3'^'^ of income towards [iii] personal expenditure. [iv] Learned MACT has failed to appreciate the evidence on record. For the 3*^^ respondent-insurance Companv:- 12. The quantum of compensation already awarded is excessive. There are grounds to interfere with the judgment and the appeal is fit to be dismissed. 13. Perused the record. Thoughtful consideration is given to the arguments advanced by the both sides. There is no appeal by the Insurance Company. The 3^^^ respondent- insurance Company alone contested the matter before the learned MACT. 14. Appeal is filed by the claimants alone. Therefore, the accident, negligence of the driver of the offending vehicle, liability of Insurance Company, violation if

8 any of conditions of the Insurance Policy, are all out of dispute. Threfore, the only questions and points remained for determination are, What is the just and reasonable compensation to which the claimants are entitled, whether compensation of Rs.6,31,900/-, awarded by the learned MACT is just and reasonable or require any interference/modification? If so, to what tune? What is the result of the appeal? 1) 2) Point No.1: VII. Precedential Guidance: Hon’ble Apex Court to have uniformity of practice and consistency 15. [i] in awarding just compensation provided certain guidelines in Sarla Verma (Smt) and Ors. Vs. Delhi Transport Corporation and Anr.^ vide paragraph Nos.18 and 19, while prescribing a table directed adoption of suitable multiplier mentioned in column No.4 of the table. As per the observations in the judgment the claimants have to establish the following: 1. Age of the deceased. 2. Income of the deceased. 3. Number of dependents. Hon’ble Apex Court directed certain steps while determining the compensation, they are: ^ 2009 (6) see 121

9 Step No.1: Ascertain the multiplicand, which shall be the income of the deceased he / she should have contributed to the dependents and the same can be arrived after deducting certain part of personal living expenses of the deceased. Step No.2: Ascertaining Multiplier. This shall be with reference to the table provided and table is provided in judgment itself. Step No.3: Calculation of the compensation. Final Step: After calculation adding of certain amount towards conventional heads towards loss of estate, loss of consortium, funeral expenditure, cost of transport, cost of medical expenses for treatment of the deceased before the death etc. are advised. [iii] Enhancing the scope for awarding just compensation, the Hon’ble Apex Court in National Insurance Company Ltd. v. Pranay Sethi and Others^ case guided for adding of future prospect. In respect of permanent employment, 50% where the deceased is below 40 years, 30% where the deceased is 40-50 years and 15% where the deceased is 50-60 years. ^ 2017(16) see 680

10 [iv]. The actual salary to be taken shall be after deducting taxes. Further, in respect of self employed on fixed salary addition is recommended, at 40% for the deceased below 40 years, at 25% where the deceased is between 40-50 years, at 10% where the deceased is between 50-60 years. Further, adding of compensation for loss of estate, loss of consortium and funeral expenses at Rs. 15,000/- and Rs.40,000/- and Rs. 15,000/- respectively is recommended by Hon’ble Apex court with an addition of 10% for three years in Pranay Sethi’s case. every M Further enlarging the scope for awarding just and reasonable compensation in Magma General Insurance Company Ltd. v. Nanu Ram and Others^, Hon’ble Apex Court observed that compensation can be awarded under the heads of loss of consortium not only to the spouse but also to the children and parents under the heads of parental and filial consortium. VIII. Analysis of Evidence:- 16. [i] PW.1, wife of the deceased, stated about the relationship, loss of dependency etc.. PW.2 is an eye witness to the accident, narrated about the accident and negligence of the driver of the offending vehicle. The evidence of PWs.1 and 2 is not much relevant for considering and determining the quantification of compensation, to which the claimants are entitled. ^ (2018) 18 see 130

11 [ii] The evidence of PW.3 alone is relevant. Summary of evidence of PW.3 is as follows: 1) PW.3 is a Charged Accountant and the deceased his client. 2) As per the evidence of PW.3, deceased used to attend civil contract works and file income tax return. 3) Income Tax returns for the year 2011-2012 are filed by PW.3. During chief examination, PW.3 has stated that gross total income of the deceased as Rs. 10,89,899/- and net tax payable is Rs. 1,86,399/-. 4) For the year 2012-2013, wife of the deceased/1 claimant, paid the income tax showing the gross income of the deceased as RS.23,10,397/-, with net tax payable Rs.5,54,263/-. deceased used to pay VAT Tax and Sales Tax on his business. 5) During the cross-examination, he has stated that the threshold of tax audit is Rs.60 lakhs for gross turn over for the assessment year 2011-2012. Hence, audit is conducted. 6) Ex.A7, Ex.A8 do not reflect the Tax audit. 7) As per Section 44 (a) (d) of Income Tax Act, 8% of the turnover would be treated as income, if the annual turnover is below Rs.60 lakhs. 8) Rs. 1,77,022/- is the TDS for the assessment year 2011-2012. 9) Rs.5,39,685/- is TDS for the assessment year 2012-2013. 10) After the death of the deceased, his family members formed the Firm and they are continuing the contract business of the deceased. The

12 [iii] Ex.A7, Income Tax returns filed indicating that the Tax returns Narasimha Raju Rudra Raju. Total i by the deceased Firm, are filed in the name of Venkata Lakshmi income is shown at Rs. 10.89,889/- and his description is shown as Proprietor of Srinivasa Constructions. [iv] After deducting the balance is shown at Rs.9,03,484/-. provision for Tax from Rs. 10,89,889/- [V] The argument is that taking 8% of the when the income is clear from the returns filed, balance sheet as on 31.03.2011 i Rs.1,26,34,969/-, 8% of the same comes to around Rs.10,10,000/-. After deduction of Tax liability probably the income would comes to Rs.9,00,000/-. No doubt it is a self assessment. turn over does not arise Sirinviasa constructions IS indicating for the purpose of VAT output at [Vi] If the Ex.A8 is taken into count, there However, as the returns under Ex.A8 learned MACT is justified in taking the return filed by the deceased death alone. will be further increase. are filed subsequent to death and the prior to [vii] The grievance of the appellants is that, taking of 8% of Rs. 10,89,889/- income reflected in income tax Returns, when TDS is paid at around Rs. 1,86,411/- is not correct approach.

13 [viii] If the stand of the claimants is to be taken as correct from the profit around Rs.9,00,000/-, monthly income comes to Rs.75,000/-. [ix] It is relevant to note that the claimants in their claim petition pleaded the income of the deceased at Rs.6,00,000/-. The claimants are from business and urban back ground, duly assisted by the legal and Tax professionals, having a family business. [X] Further, it is also relevant to note that a Certificate issued vide Ex.A6, by Jampana constructions shows that Jampana constructions executed contracts at Gudivada and Nandigama, for Rs. 1,34,26,786/- during the year 2010-2011. But it is a Construction Company, who are its members, whether it is a Firm having several partners is not known. Form 16-A of Jampana Constructions covered by Ex.AIO and Ex.A11 would show that it is a private limited Firm. [xi] [xii] Income Tax returns, covered by Ex.A7 are pertaining to Srinivasa Constructions. What is the nature of the establishment of Srinivasa Constructions, whether it is the sole Proprietory concern and what was the actual take home of the deceased, is not clearly spoken by the PW.3. Upon considering the evidence available on record, it is not possible to completely rely on Ex.A7 and Ex.A8 alone, likewise taking 8% of the income shown in Ex.A7 is also found not correct. However, taking of [xiii]

14 income notionally at Rs.20,000/- per month, Rs.2,40,000/- per annum, found reasonable. [xiv] Whereby the annual income comes to Rs.2,40,000/-. If 1/3^^ of the same is deducted towards personal expenditure, the contribution of the deceased to the family comes to Rs. 1,60,000/-. The age of the deceased as per the driving licence/Ex.A9 [where under the date of birth is mentioned as 01.05.1951] as on the date of accident, is ‘62’ years. For the age group of ‘62’, the multiplier applicable is ‘7’ as per Sarla [XV] Then upon application of the same, the entitlement for Verma’s case. compensation under the head of loss of dependency comes to [Rs. 1,60,000 x 7’] Rs.11,20,000/-. Hence, the claimants are entitled for Rs.11,20,000/- under the head of loss of dependency. [xvi] The claimants are entitled Rs.15,000/- towards loss of estate. Rs.15,000/- towards funeral expenses. Rs.40,000/- each towards loss of consortium. In all the entitlement of claimants comes to Rs.13,50,000/-. In the light of precedential guidance and in view of the reasons and evidence referred above, the entitlement of the claimants for reasonable compensation in comparison to compensation awarded by the learned MACT 17. is found as follows;

15 S.No. Head Granted by the learned MACT Fixed by this Appellate Court Rs.11,20,000/- 1. Loss dependency of Rs..4,06,896/- 2. Loss consortium of Rs. 1,00,000/- Rs.2,00,000/- (Rs.40.000/- @ claimant: 40,000x5) each 3. Funeral Rs.25,000/- Rs.15,000/- Expenditure and Transport Expenditure Loss of estate Rs. 1,00,000/- Rs.15,000/- 4. Total: Rs.06,31,896/- Rs.13,50,000/- 18. , In view of the aforesaid reasons, it is found that claimants are entitled for compensation for Rs.13,50,000/- with interest at 7.5% per annum from the date of petition till the date of realization decree and the award under ^ challenge require modification accordingly. i I Point No.1 is answered accordingly. Point No.2: In the result, the appeal is allowed, as follows; ,(i) The compensation awarded by the learned MACT at Rs.6,31,900/- with interest @8% p.a. is modified as Rs.13,50,000/- with interest @7.5% p.a.. from the date of petition, till the date of realization. 19. Apportionment: (ii) Claimant No.1 is entitled at Rs.7,50,000/- with proportionate interest and total costs.

16 (iii) Claimant Nos.2 to 5 are entitled at Rs.1,50,000/- each with proportionate interest which shall be inclusive of compensation under the head of loss of consortium, (iv) All the claimants compensation amount on deposit at are entitled to withdraw their once. (V) The claimants shall pay the Court fee i compensation, before the learned MACT. respective share of in respect of the enhanced part of As a sequel, miscellaneous petitions if any, pending in the appeal shall stand closed. Sd/- K SRINIVASA RAJU ASSISTANT REGISTRAR //TRUE COPY// SECTION OFFICER To 1. The Chairman, Motor Accidents Claims Tribunal Rajahmundry, East Godavari District, (with records if any) 2. One CC to Sri N Siva Reddy, Advocate [OPUC] 3. One CC to Sri Javvaji Sarath Chandra, Advocate [OPUC] 4. The Section Officer, VR Section, High Court of Andhra Amaravati. (to dispatch the triai court records) 5. Two CD Copies cum District Judge, Pradesh at TK sree

\ *- HIGH COURT DATED;20/06/2025 JUDGMENT + DECREE MACMA No.203 of 2016 JIIL 2025 I TO ALLOWING THE MACMA