Commissioner for South African Revenue Service v Labat Africa Limited (A206/06)
Commissioner for South African Revenue Service v Labat Africa Limited (A206/06) [2009] ZAGPPHC 152; 72 SATC 75 (11 December 2009)
The court held that the issue of shares by a company for the acquisition of an asset constitutes expenditure for the purposes of section 11(gA) of the Income Tax Act. The judgment reasoned that if the transaction had involved the seller purchasing shares at an agreed price and applying the proceeds to the purchase consideration, it would clearly be expenditure. There is no material distinction between such a transaction and the issue of shares in exchange for an asset. The court confirmed that the incurrence of an unconditional legal obligation to issue shares satisfies the requirement of 'ex…
Source excerpt
- Income Tax Deduction
- Expenditure Definition
- Issue Of Shares
- Section 11 Ga Interpretation