South Africa Case Law

Vantage Mezzanine Fund 2 Partnership and Another v Cedar Park Properties 39 (Pty) Ltd (45678/2018)

Vantage Mezzanine Fund 2 Partnership and Another v Cedar Park Properties 39 (Pty) Ltd (45678/2018) [2020] ZAGPJHC 402 (26 August 2020)

Court

South Gauteng High Court, Johannesburg

Case number

45678/2018

Judge

Twala

The High Court ordered Cedar Park Properties 39 (Pty) Ltd into final winding-up after finding it unable to pay its debts and rejecting a bid to suspend the liquidation.

• Company Liquidation
• Inability To Pay Debts
• Business Rescue Proceedings
• Contingent Liabilities
• Company-liquidation
• Unable-to-pay-debts

Ackermans Ltd v Commissioner for South African Revenue Service, Pep Store (SA) Ltd v Commissioner for South African Revenue Service (441/09)

Ackermans Ltd v Commissioner for South African Revenue Service, Pep Store (SA) Ltd v Commissioner for South African Revenue Service (441/09) [2010] ZASCA 131; 2011 (1) SA 1 (SCA) ; [2011] 2 All SA 125 (SCA); 73 SATC 1 (1 October 2010)

Court

Supreme Court of Appeal

Case number

441/09

Judges

NAVSA, CLOETE, CACHALIA, MHLANTLA, BOSIELO

The Supreme Court of Appeal held that Ackermans did not incur deductible expenditure when a purchaser assumed contingent liabilities under a business sale.

• Income Tax Act 58 Of 1962
• Deductibility Of Expenditure
• Contingent Liabilities
• Sale Of Business
• Revenue Vs Capital Expenditure
• Income-tax-act-58-of-1962

Velocity Freight Services (Pty) Ltd v Digi Plastix (Pty) Ltd (23352/09)

Velocity Freight Services (Pty) Ltd v Digi Plastix (Pty) Ltd (23352/09) [2010] ZAWCHC 166 (2 August 2010)

Court

Western Cape High Court, Cape Town

Case number

23352/09

Judge

Fortuin

High Court granted a winding-up application, finding the respondent commercially insolvent and rejecting its disputed claim that the applicant had to irradiate garlic.

• Company Liquidation
• Commercial Insolvency
• Creditor Locus Standi
• Statutory Obligation
• Contingent Liabilities
• Company-liquidation

A Co. Limited and Another v Commissioner for the South African Revenue Service (12323; 12324)

A Co. Limited and Another v Commissioner for the South African Revenue Service (12323; 12324) [2009] ZATC 3; 72 SATC 61 (14 May 2009)

Court

Tax Court

Case number

12323; 12324

Judges

N.P. Willis, E. Lai King, T. Fubu

The court held that the appellant was not entitled to deduct the contingent liabilities assumed by the purchaser as expenditure under section 11(a) of the Income Tax Act. The liabilities in question were conditional and had not materialised at the time of sale, and thus did not constitute expenditure actually incurred. The court found that the transaction resulted in an increase, not a diminution, of the appellant's patrimony, as the purchaser assumed the risk of the liabilities and the appellant received a net cash amount. The expenditure was not incurred in the production of income, was of…

Source excerpt

• Income Tax Deduction
• Contingent Liabilities
• Sale Of Business
• Capital Vs Revenue Expenditure
• Section 11a
• Section 23g

Edgars Stores Ltd v Commissioner for Inland Revenue (416/86)

Edgars Stores Ltd v Commissioner for Inland Revenue (416/86) [1988] ZASCA 70 (30 May 1988)

Court

Supreme Court of Appeal

Case number

416/86

Judges

Corbett, Hoexter, Vivier, Viljoen, Nicholas

The court held that turnover rental under the lease was contingent until the lease year ended, so it was not “actually incurred” for section 11(a) deduction purposes in the earlier tax year.

• Income Tax Act
• Deductibility Of Expenditure
• Lease Agreements
• Contingent Liabilities
• Income-tax
• Tax-deductions