South Africa Case Law

Commissioner for the South African Revenue Services v Megs Investments (Pty) Ltd and Another (034/03)

Commissioner for the South African Revenue Services v Megs Investments (Pty) Ltd and Another (034/03) [2004] ZASCA 30; [2005] 4 All SA 169 (SCA); 2005 (4) SA 328 (SCA); 66 SATC 175 (31 March 2004)

Court

Supreme Court of Appeal

Case number

034/03

Judges

Zulman JA, Brand JA, Cloete JA, Jones AJA, Ponnan AJA

The respondents failed to establish that the interest income earned during the 1996 tax year was income derived from carrying on a trade as contemplated by section 20(1) of the Income Tax Act. Their activities in seeking new business opportunities did not amount to active trading, and their investment of the proceeds from the sale of their business was not conducted in the course of an investment company trade. The evidence showed that the respondents intended to pursue similar business ventures, but no contracts were concluded, no organization was established, and no income was earned from t…

Source excerpt

• Assessed Loss Set Off
• Income Tax Act Section 20
• Trade Definition
• Interest Income
• Onus Of Proof

Kommissaris: Suid Afrikaanse Inkomstediens and Another (96/2001)

Kommissaris: Suid Afrikaanse Inkomstediens and Another (96/2001) [2002] ZAFSHC 4 (13 June 2002)

Court

Free State High Court, Bloemfontein

Case number

96/2001

Judges

Hancke, Cillié, Sibeko

The court held that the respondents carried on trade in 1996 through active business steps after selling their business, so the assessed loss could be set off.

• Carry Forward Of Tax Losses
• Definition Of Trade
• Income Tax Act Section 20
• Active Business Operations
• Carry-forward-of-tax-losses
• Definition-of-trade