GDF Court Cases Flashcards
Carrying on a Trade
CIR vs Burgess
Consider the following:
* is there continuity of the actiities
* is the long-term objective of the trade to gnerate profit?
Expenditure & Losses
CIR vs Joffe & Co (Pty) Ltd
Dfference between expenditure & losses
* “Loss” = involuntary deprivation
* “Expense” = voluntary payment
Actually incurred
KBI vs National Press Ltd
If not explicit & absolute liability to pay, expense not actually incurred
Actually incurred
CIR vs Edgars Stores Ltd
Unconditional legal obligation before it can be seen as actually incurred
Actually incurred
CIR vs Golden Dumps (Pty) Ltd
If the outcome of a dispute over a expenditure remains undertermined at the end of a tax year, the obligation is not actually incurred
Year of Assessment
Sub-Nigel Ltd vs CIR
s11 (a) does not require expenses to be in the same year of the income
In production of Income
CIR vs Port Elizabeth Electric Tramway Co Ltd
- An expenditure incurred must originate from operating a business operation with the the goal to earn an income
- The expenditure incurred must in other words have a close connection with the business’s income-earning operations
In production of Income
COT vs Provider
Expenditure incurred to induce employees to enter and remain in the service of a taxpayer may qualify for a deduction since the purpose is to produce current or future income
In production of Income
CIR vs Joffe & Co (Pty) Ltd
The expenditure or the act leading to the expenditure as has to be a “necessary concomitant” of the business operation to be in the production of income
Not of a capital nature
CIR vs New State Areas Ltd
Floating or circulating capital vs fixed capital: cost of performing income-earning operations vs cost of establishing or improving or adding to the income-earning point
Not of a capital nature
CIR vs Rand Mines (mining services) Ltd
If the expenditure is more closely related to the TP’s income-generating structure than to his income-earning operations, it is capital in nature
