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SC Clarifies ITR Basis for Computing Motor Accident Compensation

Case Law Details

TaxGuru Citation
2026 taxguru.in 8596
Case Name
Rashmirekha Tripathy And Anr Vs Branch Manager (Supreme Court of India)
Date of Judgement/Order
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Rashmirekha Tripathy And Anr Vs Branch Manager (Supreme Court of India)

The Supreme Court allowed the appeal against the judgment dated 25.04.2024 passed by the High Court of Orissa in MACA No. 452 of 2023, which had modified the compensation awarded by the Motor Accident Claims Tribunal (MACT), Behrampur, in MAC Case No. 92 of 2019.

The case arose from a motor vehicle accident that occurred on 29.05.2018. The deceased, aged 39 years, was travelling in his vehicle when a truck allegedly driven in a rash and negligent manner collided with it on the National Highway near Kaliabali Chakka. He sustained injuries and later died during treatment. An FIR was registered under Sections 279, 337, 338 and 304-A of the Indian Penal Code, 1860. The legal representatives of the deceased filed a claim petition under Section 166 of the Motor Vehicles Act, 1988, seeking compensation of Rs. 2,25,00,000/-. They stated that the deceased was engaged in his own construction business, earning Rs. 15,00,000 per annum, and was the sole breadwinner of the family.

The Tribunal held the insurance company liable to pay compensation of Rs. 2,27,00,064 with interest at 6% per annum from 07.05.2019. It determined the annual income of the deceased at Rs. 15,00,000 based on the Income Tax Return (ITR) for Assessment Year 2018-19, deducted one-third towards personal expenses considering three dependants, applied a multiplier of 16, and awarded compensation under conventional heads in accordance with law.

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Author Info

CA Sandeep Kanoi
Qualification: CA in Job / Business
Company: Taxguru Consultancy
Location: Mumbai, Maharashtra
Articles Published: 19,234

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