The Delhi High Court set aside the deduction of tax exempted allowance in the insurance amount awarded by the Motor Accidents Claims Tribunal (MACT).
United India Insurance Co Ltd, the appellant challenged the Award passed by the Motor Accidents Claims Tribunal-02, Delhi (‘Tribunal’) in MAC Petition titled Smt. Sonia & Ors. v. Sh. Satish Kumar & Ors.
The Claim Petition was registered on the Detailed Accident Report (‘DAR’) filed by the police corresponding to the investigation carried out in FIR No. 1484/15 under Sections 279/304A Indian Penal Code, 1860 registered at PS Narela.
As per the DAR, on 21.11.2015, the deceased-Arun Kumar was going on his motorcycle and at about 1:15 pm, when he reached Singhu Border Road in front of the Deepak Apartments, Narela, Delhi, one Maruti Van bearing registration no. HR-55-L-6792 (‘Offending Vehicle’), which was being driven at high speed and in a rash and negligent manner, came and hit his motorcycle.
As a result of the accident, the deceased fell from his motorcycle and he and his motorcycle came under the Offending Vehicle. The deceased was rushed to the SRHC Hospital, Narela, Delhi, where he was medically examined and was declared as brought dead.
The Tribunal, by way of the Impugned Award, has held that the deceased sustained fatal injuries in the road accident due to the Offending Vehicle being driven in a rash and negligent manner. The Tribunal awarded Rs.69,56,000/- along with interest at the rate of 9% per annum with effect from the date of the filing of the petition, that is 28.01.2016, till the date of its realization, in favour of the Legal Representatives of the deceased.
The claimants challenged the deduction of Rs.11,640/- from the annual income of the deceased. The Tribunal, in the Impugned Award, has directed the deduction of the above amount as in Form No.16 for the Assessment Year 2015-16 (Ex.PW1/3), allowances to the extent of Rs.11,640/- were shown as exempted from Tax.
The single bench of Justice Navin Chawla held that “merely because certain allowances are not taxable, the same would not warrant their deduction from the annual income of the deceased to determine the compensation payable to the claimants towards Loss of Dependency. It is to be remembered that for determining the Loss of Dependency, what is relevant is the ‘income’ of the deceased and not the ‘taxable income’ of the deceased.”
The Court set aside the deduction of Rs. 11,640/- from the income of the deceased for purposes of awarding Loss of Dependency.
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