South Africa Case Law

Mobile Telephone Networks Holdings (Pty) Ltd v Commissioner for the South African Revenue Service (A5033/10)

Mobile Telephone Networks Holdings (Pty) Ltd v Commissioner for the South African Revenue Service (A5033/10) [2011] ZAGPJHC 181 (2 November 2011)

Court

South Gauteng High Court, Johannesburg

Case number

A5033/10

Judge

Victor

The High Court held that professional fees for implementing and operating the Hyperion system were deductible, as they were incurred in producing income.

• Income Tax Deduction
• Trade Definition
• Professional Fees
• Capital Vs Revenue Expenditure
• Income-tax-deduction
• Professional-fees

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

Robin Consolidated Industries Ltd. v Commissioner for Inland Revenue (496/95)

Robin Consolidated Industries Ltd. v Commissioner for Inland Revenue (496/95) [1997] ZASCA 12; (1997 (3) SA 654 (SCA); [1997] 2 All SA 195 (A); (14 March 1997)

Court

Supreme Court of Appeal

Case number

496/95

Judges

Mahomed, Hefer, Howie, Schutz, Scott

The Supreme Court of Appeal held that Robin Consolidated Industries Limited did not carry on trade during the 1988 tax year. The two sales of goods in bond were found to be mere realisations of assets in the course of liquidation, not trading activities. The court affirmed the established interpretation of section 20(1) of the Income Tax Act, namely that assessed losses can only be carried forward if there is income from trade in the relevant year and if a new balance of assessed loss is struck each year. The court found no basis to depart from the rule in SA Bazaars v CIR, noting that the la…

Source excerpt

• Assessed Loss Carry Forward
• Income Tax Act Interpretation
• Trade Definition
• Liquidation Realisation