South Africa Case Law

Avenant v Commissioner for the South African Revenue Service (367/2015)

Avenant v Commissioner for the South African Revenue Service (367/2015) [2016] ZASCA 90; 78 SATC 343 (1 June 2016)

Court

Supreme Court of Appeal

Case number

367/2015

Judges

Ponnan, Theron, Saldulker, Swain, Mbha

The court held that grapes delivered to a co-operative, pressed into pulp and mixed with other members' pulp, retain their identity as 'produce' for the purposes of the Income Tax Act. The transformation into pulp and commencement of fermentation do not remove the produce from the ambit of farming operations or render it work-in-progress outside the definition of 'produce'. Fractional ownership in the pooled pulp does not absolve the appellant from accounting for closing stock, as ownership is retained pro rata to the contribution. The value of such produce need not be market value but must b…

Source excerpt

• Income Tax Act
• Farming Operations
• Produce Valuation
• Closing Stock
• Ownership Of Pooled Produce

Commissioner for the South African Revenue Service v Kluh Investments (Pty) Ltd (115/2015)

Commissioner for the South African Revenue Service v Kluh Investments (Pty) Ltd (115/2015) [2016] ZASCA 5; [2016] 2 All SA 317 (SCA); 2016 (4) SA 580 (SCA); 78 SATC 177 (1 March 2016)

Court

Supreme Court of Appeal

Case number

115/2015

Judges

Ponnan, Willis, Zondi, Fourie, Kathree-Setiloane

The Supreme Court of Appeal held that Kluh Investments was not carrying on farming operations, so plantation-sale proceeds were not gross income under section 26.

• Income Tax Act
• Farming Operations
• Capital Vs Income
• Deeming Provisions
• Taxable Income
• Onus Of Proof

A v Commissioner for the South African Revenue Service (13132)

A v Commissioner for the South African Revenue Service (13132) [2014] ZATC 3; 77 SATC 93 (8 December 2014)

Court

Tax Court

Case number

13132

Judge

Allie

The Tax Court held that wine grapes delivered to a co-operative remained closing stock held by the farmer, but the SARS valuation was set aside and remitted.

• Income Tax Act
• Farming Operations
• Closing Stock Valuation
• Produce Definition
• Burden Of Proof
• Tax Assessment Procedure

ABC (Proprietary) Limited v Commissioner for the South African Revenue Services (13002)

ABC (Proprietary) Limited v Commissioner for the South African Revenue Services (13002) [2013] ZATC 3; 75 SATC 329 (19 August 2013)

Court

Tax Court

Case number

13002

Judge

Davis

The Tax Court held that proceeds from the sale of a plantation were gross income, finding the appellant carried on farming operations through its plantation business.

• Income Tax Act
• Gross Income Inclusion
• Farming Operations
• Capital Vs Income
• Onus Of Proof
• Gross-income

Commissioner for the South African Revenue Services v Smith (563/2001)

Commissioner for the South African Revenue Services v Smith (563/2001) [2002] ZASCA 126; 2002 (6) SA 621 (SCA); 65 SATC 6 (26 September 2002)

Court

Supreme Court of Appeal

Case number

563/2001

Judges

Heher, Hefer, Schutz, Scott, Brand

The Supreme Court of Appeal held that section 26(1) requires a genuine intention to farm profitably, but not a separate reasonable prospect of profit.

• Income Tax Act Section 26
• Farming Operations
• Genuine Intention To Profit
• Objective Vs Subjective Intent
• Income-tax
• Farming-operations