ITR Is Sufficient Proof of Income: HC Enhances Motor Accident Compensation After ITR Was Ignored

The Jammu and Kashmir High Court held that the Tribunal acted negligently in ignoring the deceased’s duly filed ITR for 2007–08, which clearly established her income, leading to an incorrect computation of compensation, and consequently enhanced the award while dismissing the insurance company’s appeal.

The Honourable Justice Sanjeev Kumar of the Jammu and Kashmir High Court has delivered its judgement in two connected appeals arising from a motor accident claim filed by companies named Oriental Insurance Company Ltd and Prem Gupta S/o Late Chander Parkash Gupta (Appellants). The final decision on the matter was announced on February 13, 2026.

The case concerns an accident that took place on November 1, 2007, near Berero Khad near Barian Camp, Supwal Tehsil, and District Samba. Neelam Gupta, wife of Prem Gupta in the present case, along with a few other individuals, was travelling in a Maruti car from Jammu to Dharamshala. The vehicle got crushed between two offending buses coming from opposite directions at a really high speed. Their car was bearing Registration No. JK02M-0615, while the two buses were bearing Registration Nos. JK02X-1731 and JK028-7129. The bus drivers were driving in a careless manner and in a hurry. Neelam Gupta lost her life on the spot of the accident.

Thereafter, her husband, Prem Gupta, sought compensation. In August 2009, the Motor Accident Claims Tribunal awarded him Rs. 222,024 with 7.5% annual interest as compensation for his wife’s death. Prem was not satisfied with the amount awarded and hence filed a separate appeal seeking enhanced compensation, while Oriental Insurance Company raised objection to the amount awarded.

When the appeal was filed before the Delhi High Court, the insurance company argued that Prem Gupta did not furnish relevant documents proving the exact income of the deceased. However, when the court analysed the facts of the case, it noted that the furnished ITR (Income Tax Return) of the deceased for the assessment year 2007-08 explicitly shows her total income of Rs. 271,747 and that there was no valid reason to doubt it.

The Court held that the Tribunal had wrongly calculated the compensation by ignoring the actual income of the deceased and by not applying the correct legal principles. Applying the multiplier of 9 and adding 10% towards future prospects, along with amounts for funeral expenses and loss of consortium according to the guidelines of the Supreme Court, the Court ruled that ideal compensation should be Rs. 14,00,149.

The High Court dismissed the insurance company’s appeal and enhanced the compensation payable to Prem Gupta, with interest at 7.5% per annum from the date of filing of the claim petition.