Income Tax Returns May Not Be Accurate Guide To Determine Real Income Of Parties Engaged In Matrimonial Conflict : Supreme Court

The Supreme Court observed that the income tax returns may not be an accurate guide of the real income of parties engaged in a matrimonial conflict.

Family Court has to determine the real income on a holistic assessment of the evidence before it, the bench of Justices DY Chandrachud and Hima Kohli said.

In this case, the Family Court ordered a Husband to pay maintenance at the rate of Rs 20,000 per month to his wife and Rs 15,000 each to their daughters. This was based on a finding that he is earning Rs. 2 lacs as monthly income. While considering the revision petition filed by the Husband, the High Court noticed as per the Income Tax Return (I.T.R.) filed by thim he is only earning Rs. 4.5 lacs per annum. It was further observed that the Family Court had not indicated the basis on which it had assessed his income at Rs Two Lakhs per month

In appeal, the Apex Court bench, observed:

"On the first aspect, it is well-settled that income tax returns do not necessarily furnish an accurate guide of the real income. Particularly, when parties are engaged in a matrimonial conflict, there is a tendency to underestimate income. Hence, it is for the Family Court to determine on a holistic assessment of the evidence what would be the real income of the second respondent so as to enable the appellants to live in a condition commensurate with the status to which they were accustomed during the time when they were staying together. The two children are aged 17 and 15 years, respectively, and their needs have to be duly met".

The bench said that the High Court was not justified in setting aside the order of the Family Court on this ground. The court therefore restored the Revision petition to the file of the High Court  for fresh consideration.

Case details

Kiran Tomar vs State of Uttar Pradesh | 2022 LiveLaw (SC) 904 | CA 1865 of 2022 | 31 October 2022 | Justices DY Chandrachud and Hima Kohli

Counsel For Petitioner(s) : Mr. Ravi Prakash Mehrotra, Sr. Adv. Mr. Nagendra Singh, Adv. Ms. Akansha, Adv. Mr Ashish Pandey, Adv. Mr Sanjay Gupta, Adv. Mr Prateek Rai, Adv. Mr. Akash Choudhary, Adv. Dr. Sushil Balwada, AOR

Counsel For Respondent(s) Ms. Priya Hingorani, Sr. Adv. Mr. Sunny Choudhary, AOR Mr. Manoj Kumar, Adv. Mr. Abhimanyu Singh, Adv. Ms. Monika Rai, Adv. Mr. Sarvesh Singh Baghel, AOR

Headnotes

Code of Criminal Procedure, 1973 ; Section 125 - Income tax returns do not necessarily furnish an accurate guide of the real income. Particularly, when parties are engaged in a matrimonial conflict, there is a tendency to underestimate income. Hence, it is for the Family Court to determine on a holistic assessment of the evidence what would be the real income. (Para 10)

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