Income Tax Returns not accurate guide to determine real income of parties in matrimonial disputes: Supreme Court

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The Supreme Court on Tuesday reiterated that income tax returns (ITR) do not reflect the actual income of a party and cannot be an accurate guide to determine income of parties in matrimonial cases [Kiran Tomar and ors vs State of Uttar Pradesh].

A bench of Justices DY Chandrachud and Hima Kohli noted that during matrimonial disputes, parties tend to underestimate incomes and, therefore, family courts have to carry out a holistic assessment to determine the real income.

“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 Court said.

A family court had in March this year had ordered a husband, the second respondent in the instant case, to pay ₹20,000 per month to his wife and ₹15,000 each to their daughters as maintenance.

The sum was based on a finding that his monthly income was ₹2 lakh.

On a revision petition filed by the husband, the Allahabad High Court, noted that his monthly income as per his ITR was ₹37,500.

It, therefore, held that the family court had not indicated how it arrived at the sum of ₹2 lakh per month and set aside that ruling.

This verdict of the High Court came to be assailed before the Supreme Court.

The top court said that the High Court was not justified in setting aside the family court.

It opined that the High Court did not appreciate the reasons that weighed with the family court, which included the fact that the husband had, in his ITR, not included the income from the business he was running with his father.

The High Court ought to have been aware of the parameters of its revisional jurisdiction, the Supreme Court said.

It added that the children’s needs have to be duly met.

The bench also noted that the husband had failed to comply with an earlier interim order passed by it in which the top court had directed him to pay the arrears of maintenance.

“Ordinarily, we would have been inclined to pass a coercive order against the second respondent, but, in order to furnish a further opportunity to him to comply, we are passing a conditional order,” the Court said.

The Court remanded the matter back to the High Court for fresh consideration but made it clear that arrears have to be paid by the end of this year, failing which the husband’s revision plea before the High Court will stand dismissed.

Further, regular maintenance will also have to be paid during the course of proceedings before the High Court, the bench directed.

Senior Advocate Ravi Prakash Mehrotra appeared for the appellants. Senior Advocate Priya Hingorani appeared for the husband.

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