South Africa Case Law

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

Commissioner For The South African Revenue Service v Scribante Construction (Pty) Ltd (026/2001)

Commissioner For The South African Revenue Service v Scribante Construction (Pty) Ltd (026/2001) [2002] ZASCA 161; 2002 (4) SA 835 (SCA); 64 SATC 379 (14 May 2002)

Court

Supreme Court of Appeal

Case number

26/2001

Judges

Howie, Schutz, Heher

South Africa’s Supreme Court of Appeal held that interest on shareholder loan accounts credited with dividends was deductible under section 11(a) and not barred by section 23(g).

• Income Tax Deduction
• Interest On Shareholder Loans
• Dividend Distribution
• Section 11a
• Section 23g
• Income-tax