Speedster Trucking (Pty) Ltd (Speedster) is a transportation company, focusing on the transportation of goods for several retail grocers and retail companies across Southern Africa. It transports general valued cargo such as food all over Southern Africa. The taxpayer has a 28 February 2021 year-end. The companys in-house accountant contacts you and asks you to prepare a tax opinion on the following two matters that affect Speedster. One of the companys truck drivers was killed in an accident whilst transporting cargo from Mpumalanga to the Limpopo province. Due to heavy rains, the truck driver lost control of the truck and crashed into an old bridge, which killed the driver instantly. The truck drivers wife sued Speedster for compensation in January 2021. On 20 February 2021, the High Court granted the wife compensation and ordered Speedster to pay the wife an amount of R1 0000 000 within 30 days from the date of the court order. Speedster paid this amount to the drivers wife on 15 March 2021.

discuss the tax deductibility of the compensation amount in terms of the general deduction formula (section 11(a) and section 23 of the Income Tax Act) as well as the taxability of the deposit amount as gross income for the 2020/21 year of assessment.