Gross Income Cases

Question 1

Principle

Cohen

Answer 1

Residency = where he will return to after his wanderings, real home

Question 2

Principle

Kuttle

Answer 2

Resident = habitually/normally resident.

Question 3

Principle

Lategan

Answer 3

Amount = any form of property that has a monetary value.

Question 4

Principle

Butcher Brothers

Answer 4

Onus lies with SARS to determine the amount to be included

Question 5

Principle

People’s Stores

Answer 5

You need to be entitled to the amount for it to accrue to you

Question 6

Principle

Witwatersrand Association of racing clubs

Answer 6

Accrues = no legal obligation to pay over.

Subsequent expenditure is irrelevant.

Question 7

Principle

Mooi

Answer 7

Accrues = unconditionally entitled

Question 8

Principle

Geldenhuys

Answer 8

Included if received by TP, on his own behalf, for his own benefit

Question 9

Principle

MP Finance Group CC

Answer 9

Bilateral receipts = received

Question 10

Principle

Pyott Ltd

Answer 10

Deposits = received

Question 11

Principle

Visser

Answer 11

Tree vs Fruit.

Question 12

Principle

George Forest Timber

Answer 12

Fixed vs Floating capital
Fixed = structure that enables income.
Float = consumed in process of production

Question 13

Principle
Richmond Estates
(Pty) Ltd

Answer 13

Initial intention is written in MOI of company

Question 14

Levy

Answer 14

Determine the dominant intention should be established

Question 15

Elandsheuwel Farming

Answer 15

Intention of SH changes when SH change

Question 16

Pick n Pay Employee Share Purchase Trust

Answer 16

Scheme of profit making is essential to classify it as revenue in nature

Question 17

Stott

Answer 17

Consider Dominant intention.

Question 18

Nell

Answer 18

Consider reasons for selling. If to acquire anothet asset = capital

Question 19

John Bell

Answer 19

Decision to sell does not change intention.

Realise asset to its best advantage.

Question 20

Natal Estates Ltd

Answer 20

Cross the rubicon = revenue in nature

Question 21

Nussbaum

Answer 21

Secondary purpose could taint primary purpose.

Question 22

Berea West Estates

Answer 22

Receipts of realisation company = capital

Question 23

Founders Hill (Pty) Ltd

Answer 23

Need to have real justification for the formation of a realisation company.

Question 24

Fourie Beleggings

Answer 24

Compensation for damages of capital asset = capital

Compensation for loss of profit = revenue

Question 25

Stellenbosch Farmers’ Winery

Answer 25

Compensation for cancelation of a contract to an income earning right = capital