The Hon’ble Supreme Court, on 9th December 2019, in the matter of Malarvizhi & Ors. v. United India Insurance Company Limited & Anr. pronounced that value of depreciation cannot amount to tangible income for the purposes of computing annual income in a claim before the Motor Accident Claims Tribunal.
The Hon’ble Supreme Court observed that:
The determination of compensation in a claim petition under Section 166 of the Motor Vehicles Act, 1988 must proceed on the basis of the income tax return, where available. The income tax return is a statutory document on which reliance may be placed to determine the annual income of the deceased. (Para 10)
Depreciation is the deduction allowed for the decline in the 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 the MACT. (Para 12)
Copy of judgement: Judgement_09-Dec-2019
-Adv. Tushar Kaushik