Income-tax returns filed after the accident cannot be discarded when assessing the deceased’s income.

Abhishekbhai Pravinchandra Gandhi, aged 21 years, died in a motor accident on 9 January 2002 when a dumper truck, allegedly driven rashly and negligently while overtaking his motorcycle, collided with him.

An FIR was registered against the truck driver, and the deceased’s parents and dependent brother filed a claim petition under Section 166 of the Motor Vehicles Act, 1988, seeking ₹30,00,000 compensation.

The Motor Accident Claims Tribunal held the truck driver solely negligent and awarded ₹19,32,000 with 9% interest, comprising loss of dependency, funeral expenses, and love and affection.

The claimants appealed under Section 173 of the Act, seeking enhancement, principally contending that the Tribunal had wrongly excluded the deceased’s income-tax return for Assessment Year 2002–03 and had applied only a 30% addition for future prospects.

Liability and negligence were not challenged before the High Court.

1. Whether the Tribunal erred in determining the deceased’s annual income by disregarding the income-tax return for Assessment Year 2002–03, filed after the accident, despite the supporting profit-and-loss accounts and balance sheets?

2. Whether the claimants were entitled to a 40% addition towards future prospects, instead of the 30% addition granted by the Tribunal?

3. Whether the compensation awarded under the conventional heads required enhancement in accordance with the principles governing funeral expenses, loss of estate, and consortium?

The Court applied Sections 166 and 173 of the Motor Vehicles Act, 1988, governing claims for compensation arising from motor accidents and appeals against awards of the Claims Tribunal.

It relied on Nidhi Bhargava v. National Insurance Co. Ltd., 2025 SCC OnLine SC 872, for the principle that income-tax returns filed after the accident cannot be rejected solely on that ground and may be considered when assessing the deceased’s income.

Under National Insurance Co. Ltd. v. Pranay Sethi, (2017) 16 SCC 680, income means income after deduction of tax; a self-employed deceased below 40 years is entitled to a 40% addition for future prospects; and appropriate amounts must be granted under conventional heads.

The Court applied Sarla Verma v. Delhi Transport Corporation, (2009) 6 SCC 121, for deduction of 50% towards the personal expenses of an unmarried deceased and the applicable multiplier of 18 for a deceased aged 21 years.

It further relied on Magma General Insurance Co. Ltd. v. Nanu Ram, 2018 ACJ 2782, regarding consortium payable to eligible family members.

The Court found that the Assessment Year 2002–03 return related to Financial Year 2001–02, which included the date of the accident.

Since the return was supported by corresponding profit-and-loss accounts and balance sheets, its subsequent filing did not justify exclusion.

The Court therefore considered the deceased’s net incomes for the three assessment years—₹1,63,091, ₹1,75,247, and ₹1,66,255—and averaged them, fixing annual income at approximately ₹1,68,000.

Applying Pranay Sethi, the Court added 40% for future prospects, producing a prospective annual income of ₹2,35,200.

As the deceased was unmarried, 50% was deducted for personal expenses, and the resulting annual dependency loss of ₹1,17,600 was multiplied by 18, yielding ₹21,16,800 for loss of dependency.

The Court also enhanced the conventional amounts to ₹18,150 each for funeral expenses and loss of estate, and awarded ₹48,400 each to the two parents and dependent brother under the relevant consortium/love-and-affection heads, totalling ₹1,45,200.

The total compensation was enhanced from ₹19,32,000 to ₹22,98,300, comprising ₹21,16,800 for loss of dependency, ₹18,150 for funeral expenses, ₹18,150 for loss of estate, and ₹1,45,200 for consortium.

The respondents were held jointly and severally liable to pay the enhanced amount with 9% interest per annum from the date of filing of the claim petition until realization, together with proportionate costs.

The insurer was directed to deposit the enhanced difference of ₹3,66,300, with applicable interest and costs, preferably within six weeks; the Tribunal was directed to disburse the amount in accordance with law after verification.