Attieh v Commissioner for the South African Revenue Service (A5024/2015) [2016] ZAGPJHC 371; 84 SATC 420 (11 August 2016)

Attieh v Commissioner for the South African Revenue Service (A5024/2015) [2016] ZAGPJHC 371; 84 SATC 420 (11 August 2016)

The court held that the taxpayer was unconditionally entitled to the full amount of R841,655,833 as consideration for the sale of shares to Vodacom, and that this amount was both 'received by' and 'accrued to' him under para 35(1) of the Eighth Schedule to the Income Tax Act. The subsequent payment to Globalcom did not arise from an event contemplated by para 35(3)(c), as it did not affect the rights and obligations between the parties to the disposal of the asset. The deduction was therefore not permissible. Regarding the understatement penalty, the court found that the taxpayer had relied on expert advice and had reasonable grounds for his tax position, justifying a reduction of the...

Citation
[2016] ZAGPJHC 371
Parties
Appellant: Mark Russel Attieh; Respondent: Commissioner for the South African Revenue Service
Court
South Gauteng High Court, Johannesburg
Jurisdiction
South Africa
Judgment Date
11 August 2016
Case Number
A5024/2015
Procedural Posture
Civil Appeal / Appeal From Tax Court; Cross Appeal by Respondent
Outcome
Both the appeal and the cross-appeal are dismissed with costs, including those of two counsel.
Judges
P.A. Meyer, K.E. Matojane, S.E. Weiner
Legal Topics
Capital Gains Tax, Income Tax Act, Understatement Penalty, Tax Administration Act, Interpretation of Statute, Interest on Underpayment
Tax Law Civil Procedure Capital Gains Tax Income Tax Act Understatement Penalty Tax Administration Act Interpretation of Statute Interest on Underpayment

Case Brief

Summary, issues, holding and outcome

More case intelligence is available

Unlock the full research layer for this judgment.

Full judgment text Downloadable case file Legal principles 5 Authorities cited 14 Party arguments 2 Amounts and remedies 5
Sign in to unlock

Parties

Mark Russel Attieh

Appellant

Commissioner for the South African Revenue Service

Respondent

Procedural Posture

Civil Appeal / Appeal From Tax Court; Cross Appeal by Respondent

Legal Issues

  1. 1 Whether the full purchase price received for the sale of shares was 'received by' or 'accrued to' the taxpayer under para 35(1) of the Eighth Schedule to the Income Tax Act.
  2. 2 Whether the taxpayer was entitled to deduct the amount paid to Globalcom from the proceeds under para 35(3)(c) of the Eighth Schedule.
  3. 3 Whether the understatement penalty percentage applied by SARS was appropriate under the Tax Administration Act.

Ratio Decidendi

The court held that the taxpayer was unconditionally entitled to the full amount of R841,655,833 as consideration for the sale of shares to Vodacom, and that this amount was both 'received by' and 'accrued to' him under para 35(1) of the Eighth Schedule to the Income Tax Act. The subsequent payment to Globalcom did not arise from an event contemplated by para 35(3)(c), as it did not affect the rights and obligations between the parties to the disposal of the asset. The deduction was therefore not permissible. Regarding the understatement penalty, the court found that the taxpayer had relied on expert advice and had reasonable grounds for his tax position, justifying a reduction of the...

Court Disposition

Both the appeal and the cross-appeal are dismissed with costs, including those of two counsel.

Orders

  • The appeal is dismissed with costs, including those of two counsel.
  • The cross-appeal is dismissed with costs, including those of two counsel.