Income Tax Deduction Requires Evidentiary Proof of Taxable Bracket; Consortium Must Be Awarded to Each Claimant Individually

The Appellant-Insurance Company challenged the judgment and award dated 23.11.2024 passed by the Motor Vehicle Accident Claims Tribunal, Ranchi, in Claim Case No. 52 of 2020

The Tribunal had awarded the claimants Rs. 76,59,110/- with interest at 7.5% p.a. following the death of Amit Sharma in a motor accident

The Insurance Company appealed on grounds of non-deduction of income tax from the deceased's gross salary and the grant of interest on future prospects

Simultaneously, the claimants filed a cross-objection seeking enhancement of the consortium amount, which the Tribunal had limited to a lumpsum of Rs. 40,000/- for all four claimants

Whether the Tribunal erred in failing to deduct income tax from the deceased’s gross income while calculating compensation

Whether interest can be legally awarded on the component of "future prospects" added to the salary

Whether each claimant is entitled to a separate award for consortium rather than a collective lumpsum

The Court applied the principles regarding income tax deductions established in Sarla Verma (Smt) and others v. Delhi Transport Corporation and another (2009)

Regarding the distribution of consortium, the Court relied on Magma General Insurance Company Limited v. Nanu Ram Alias Chuhru Ram and others (2018), which mandates that "consortium" should be awarded to each legal heir (spouse, children, and parents) individually rather than as a single unit

Regarding the income tax deduction, the Court observed that the deceased's monthly salary was Rs. 37,724/- and the Tribunal found that, per the Income Tax department's calculator, this did not fall within the taxable bracket

The Court noted that the Insurance Company failed to produce evidence or cross-examine witnesses to prove the deceased was an income tax assessee

On the second issue, the Court rejected the challenge to interest on future prospects as no statutory provision or precedent was cited by the Appellant to bar such interest

Applying the Magma General Insurance precedent, it held that each of the four claimants (wife, two daughters, and mother) was entitled to Rs. 40,000/- individually

The Court enhanced the compensation by Rs. 1,20,000/- (representing the balance of Rs. 40,000/- for each of the four claimants for consortium)

The Insurance Company was directed to deposit the balance amount within four weeks, and the Registry was directed to transfer the funds to the claimants’ bank accounts