NEW DELHI: Pointing out that a salaried person has a fixed income while the earnings of a self-employed individual keep fluctuating, Supreme Court Wednesday said different methods should be adopted to calculate grant of compensation in road accident cases.A bench of Justices Sanjay Karol and N K Singh ruled that the income of a salaried person should be decided by the income tax return filed by him/her in the previous year, and in the case of a self-employed person, it should be the average of ITRs of the previous three years.The bench passed the guidelines on the suggestion of senior advocate J R Midha and lawyer Salil Paul who assisted the court as amicus. The order will help bring in uniformity as high courts have been adopting different approaches to assess income.SC said, “The reason for considering only the preceding year (for salaried individuals) is that the financial impact of promotions is significant and may be reflected in ITR for only that year.”The bench added, “A situation may also arise whereby the deceased/claimant mi-ght not have completed a year in the promoted position before the accident or might not have filed ITR for such period. In such cases, the court concerned shall make a reference to the promotion letter and other corroboratory financial statements.”When it comes to “self-employed/individuals carrying out their own business”, there may also be a situation where only one or two ITRs have been filed. Given such scenarios and the fluctuation of income in these professions, surrounding circumstances are also to be taken into consideration, SC said.SC passed the order while awarding compensation of around Rs 2 crore to the family of a construction businessman who died in a road accident when he was 39.
