IMPORTANT POINTS
(1) Income tax return is a statutory document on which reliance may be placed to determine annual income of deceased.
(2) Depreciation is deduction allowed for decline in real value of tangible or intangible assets over its useful life – Its value varies over time and cannot amount to tangible income for the purposes of computing annual income in a claim before MACT.

JUDGMENT

Dhananjaya Y. Chandrachud, J.

1. The present appeals arise from a judgment of a Division Bench of the Madras High Court dated 20 July 2018 in a first appeal and cross-objection from the decision of the Motor Accident Claims Tribunal [Tribunal], Ranipet.

2. The appellants are the heirs and legal representatives of Aranganathan who died as a result of a motor accident on 25 May 2001. He was travelling in an Ambassador car bearing Registration No TN 23 A 7549 which was being driven by another person. At about 12:45 am, a Tata Sierra car bearing Registration No TN 20 Z 1613 came from the opposite direction and dashed against the car of the deceased. Aranganathan was seriously injured and died during the course of the accident. He is survived by his wife and four daughters who are the appellants before this Court.

3. The appellants filed a claim petition under Section 166 of the Motor Vehicles Act, 1988 before the Tribunal, seeking compensation in the amount of Rs 99,90,000. By its award dated 11 July 2012, the Tribunal allowed the claim in the amount of Rs 59,04,000 together with interest at the rate of 7.5% per annum from the date of filing the claim petition till the date of realization of the decreed amount. The appellants filed a first appeal before the High Court of Madras. The High Court, by its impugned judgment partly allowed the appeal of the first respondent. The High Court estimated the income of the deceased at a reduced figure of Rs 2,50,000 per annum from Rs 4,48,790.55. The total compensation awarded was thus reduced from Rs 59,04,000 to Rs 33,55,000. Aggrieved by the judgment of the High Court, the claimants are in appeal before this Court.

4. The deceased was 49 years old at the time of the accident. The appellants contended that the deceased was a businessman who derived income from many sources including business and agricultural land admeasuring 36.76 acres. It was stated that the deceased was, amongst others, a wholesale dealer of cement and also owned wine shops. The land was sold in recovery proceedings after the death of the deceased.

5. The Tribunal assessed the agricultural income of the deceased at Rs 3,40,708 per annum and the total income from business at Rs 89,590. The Tribunal added to this Rs 30,000 per annum for income through real estate and contract business. The annual income of the deceased was assessed at Rs 4,60,298. 30% was added to this towards future prospects bringing the annual income to Rs 5,98,387.40. After a deduction of 1/4th of the total income towards living expenses, the Tribunal used a multiplier of 13 to arrive at a compensation of Rs.58,34,277. Damages under conventional heads, including funeral expenses, loss of consortium and loss of love and affection were computed at Rs 70,000. A total compensation of Rs 59,04,000 was awarded.

6. In appeal, the High Court concluded that on an analysis of the income tax returns filed by the deceased for the financial years 1995-1996 to 2000-2001, the income declared for the financial year 1997-1998 was the highest and must be taken as the annual income of the deceased. Hence, Rs 2,09,211 was determined to be the annual income of the deceased. Rs 40,000 per annum was added towards future prospects. The total income was thus arrived at Rs 2,50,000 per annum. No deduction was made towards personal expenses. Applying a multiplier of 13, the loss of dependency was calculated to be Rs 32,50,000. To this, funeral expenses, loss of consortium and loss of love and affection were added in the amount of Rs 1,05,000. A total compensation of Rs 33,55,000 was awarded.

7. Assailing the reduction of the compensation, Mr Jayanth Muth Raj, learned Senior Counsel appearing on behalf of the appellants has contended:

(i) The High Court has held that income tax returns take precedence over other documents in the determination of annual income. Over 52 docum