ABC (Pty) Limited v Commissioner for the South African Revenue Service (13410)
ABC (Pty) Limited v Commissioner for the South African Revenue Service (13410) [2014] ZATC 9 (4 August 2014)
The court held that mineral ore extracted from the ground does not constitute trading stock for purposes of section 23F(2) of the Income Tax Act, as it is not acquired for manufacture, sale, or exchange and is not intended to be sold in its raw state. Only once the ore is processed into concentrate does it become trading stock and meet the definition of acquisition. Therefore, the respondent may only recoup deductions related to the concentrate phase and not the initial extraction phase. Furthermore, administration, audit, and drying charges are incurred after production and do not relate to…
Source excerpt
- Income Tax Act Section 23f
- Deductibility Of Expenditure
- Definition Of Trading Stock
- Mining Vs Manufacturing
- Tax Penalties
- Costs Award