Motor accident compensation income can be based on tax returns, excluding depreciation but including prepaid licence fee on facts.

Income tax returns may be used as the primary basis for determining the deceased's annual income in motor accident compensation where reliable return evidence is available, rather than unproven estimates from other materials. Depreciation shown in the return cannot be added as income because it is a deduction for asset decline and not an earnings accretion. A prepaid licence fee reflected in the balance sheet may, on the facts, be treated as augmenting annual income and included in the computation. Compensation is then recalculated by applying future prospects, deduction for personal expenses, the appropriate multiplier, and conventional heads, resulting in an enhanced award.

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Issues: (i) Whether the annual income of the deceased for motor accident compensation should be determined primarily on the basis of the income tax return where available. (ii) Whether depreciation shown in the tax return can be added as income for computing compensation. (iii) Whether the prepaid licence fee reflected in the balance sheet could be added to annual income and how compensation should be recalculated.

Issue (i): Whether the annual income of the deceased for motor accident compensation should be determined primarily on the basis of the income tax return where available.

Analysis: The income tax return was treated as a statutory document capable of being relied upon for determining annual income. Where such material was available, the Court declined to prefer unproven estimates based on other documents. The assessment therefore proceeded on the income disclosed in the relevant return, and not on speculative higher figures from other sources.

Conclusion: The annual income was rightly determined primarily on the basis of the income tax return, and the appellants could not insist on a higher notional income from other unproved material.

Issue (ii): Whether depreciation shown in the tax return can be added as income for computing compensation.

Analysis: Depreciation represents a deduction for decline in asset value and does not constitute tangible income. It is not an accretion to the deceased's earnings and cannot be treated as part of annual income for the purpose of compensation under the Motor Vehicles Act.

Conclusion: Depreciation could not be added to the annual income.

Issue (iii): Whether the prepaid licence fee reflected in the balance sheet could be added to annual income and how compensation should be recalculated.

Analysis: The prepaid licence fee was an upfront payment made for a future period and, in the peculiar facts, was treated as an amount that augmented the deceased's annual income. The Court then applied the settled principles governing compensation: addition towards future prospects for a self-employed deceased, deduction towards personal expenses, application of the appropriate multiplier, and award of conventional sums under the recognised heads.

Conclusion: The prepaid licence fee was added to income, and compensation was recalculated accordingly with appropriate addition for future prospects, deduction for personal expenses, multiplier, and conventional heads.

Final Conclusion: The compensation award was enhanced on a reassessment of the deceased's income and the applicable principles for computation of motor accident compensation.

Ratio Decidendi: Where reliable tax-return evidence is available, it can form the primary basis for determining annual income for compensation; amounts that are not income in substance, such as depreciation, cannot be added, while prepaid outgoings that in substance augment the annual income may be taken into account for a just recompense.

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