Nasionale Pers Bpk. v Kommissaris van Binnelandse Inkomste (415/84) [1986] ZASCA 48; [1986] 2 All SA 397 (A) (16 May 1986)

Nasionale Pers Bpk. v Kommissaris van Binnelandse Inkomste (415/84) [1986] ZASCA 48; [1986] 2 All SA 397 (A) (16 May 1986)

The court held that the appellant's liability to pay vacation bonuses to employees was subject to a suspensive condition, namely that employees must remain in service until a specified date after the end of the tax year. As such, the liability was not absolute or unconditional during the relevant tax years, and the expenditure could not be regarded as 'actually incurred' for the purposes of section 11(a) of the Income Tax Act. The appellant failed to discharge the burden of proof required to show that the Commissioner was wrong in disallowing the deductions. The appeal was dismissed with costs.

Citation
[1986] ZASCA 48
Parties
Appellant: Nasionale Pers Beperk; Respondent: Kommissaris van Binnelandse Inkomste
Court
Supreme Court of Appeal
Jurisdiction
South Africa
Judgment Date
16 May 1986
Case Number
415/84
Procedural Posture
Civil Appeal / Final Appellate Judgment
Outcome
Appeal dismissed with costs.
Judges
G G Hoexter, Corbett, Hefer, Nicholas, Nestadt
Legal Topics
Income Tax Deductions, Incurred Expenditure, Burden of Proof, Conditional Liability
Tax Law Civil Procedure Income Tax Deductions Incurred Expenditure Burden of Proof Conditional Liability

Case Brief

Summary, issues, holding and outcome

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Parties

Nasionale Pers Beperk

Appellant

Kommissaris van Binnelandse Inkomste

Respondent

Procedural Posture

Civil Appeal / Final Appellate Judgment

Legal Issues

  1. 1 Whether the appellant incurred deductible expenditure for vacation bonuses during the relevant tax years.
  2. 2 Whether the liability to pay bonuses was absolute or subject to a suspensive or resolutive condition.
  3. 3 Whether the Commissioner correctly disallowed the deductions claimed by the appellant.

Ratio Decidendi

The court held that the appellant's liability to pay vacation bonuses to employees was subject to a suspensive condition, namely that employees must remain in service until a specified date after the end of the tax year. As such, the liability was not absolute or unconditional during the relevant tax years, and the expenditure could not be regarded as 'actually incurred' for the purposes of section 11(a) of the Income Tax Act. The appellant failed to discharge the burden of proof required to show that the Commissioner was wrong in disallowing the deductions. The appeal was dismissed with costs.

Court Disposition

Appeal dismissed with costs.

Orders

  • The appeal is dismissed with costs.