South Africa Case Law

Commissioner of the South Africa Revenue Service v Marula Platinum Mines Limited (218/2015)

Commissioner of the South Africa Revenue Service v Marula Platinum Mines Limited (218/2015) [2016] ZASCA 121; [2016] 4 All SA 299 (SCA); 2017 (2) SA 398 (SCA); 79 SATC 127 (22 September 2016)

Court

Supreme Court of Appeal

Case number

218/2015

Judges

Navsa, Cachalia, Tshiqi, Mathopo, Fourie

The Supreme Court of Appeal held that Marula's extraction of mineral-bearing ore and subsequent processing into concentrate constituted a manufacturing process as contemplated by the Income Tax Act. Both the ore and the concentrate qualified as 'trading stock' under section 1, regardless of whether the ore was saleable in its raw state. The court found that section 23F(2) applied to delay the deduction of expenses under section 11(a) until the corresponding income from the disposal of trading stock was taxed. The court rejected Marula's argument that its activities were solely mining, noting…

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• Income Tax Act
• Trading Stock Definition
• Manufacturing Vs Mining
• Deductions Under Section 11a
• Anti Avoidance Provisions
• Recoupment Of Expenditure

Commissioner for South African Revenue Services v Foskor (375/09)

Commissioner for South African Revenue Services v Foskor (375/09) [2010] ZASCA 45; [2010] 3 All SA 594 (SCA); 72 SATC 174 (31 March 2010)

Court

Supreme Court of Appeal

Case number

375/09

Judges

Navsa, Mhlantla, Tshiqi, Majiedt, Saldulker

The Supreme Court of Appeal held that the ore stockpiles acquired by Foskor were intended for use in manufacturing processes that resulted in products significantly different from the raw ore, namely fertilizer and other minerals with a worldwide market. The court found that the processes applied to the ore constituted manufacture for the purposes of the Income Tax Act, and that the stockpiles fell within the definition of 'trading stock'. The distinction between mining and manufacturing was found to be unhelpful in this context, as Foskor did not claim mining allowances and the acquisition a…

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• Income Tax Act
• Trading Stock Definition
• Remittal Of Interest
• Manufacture Vs Mining
• Tax Deductions

Syfrets Participation Bond Managers Ltd v Commissioner for South African Revenue Service (620/98)

Syfrets Participation Bond Managers Ltd v Commissioner for South African Revenue Service (620/98) [2000] ZASCA 80; 2001 (2) SA 359 (SCA) (30 November 2000)

Court

Supreme Court of Appeal

Case number

620/98

Judges

Smalberger, Nienaber, Marais, Plewman, Mthiyane

The court held that participations in participation bond schemes were not trading stock and dismissed the tax appeal.

• Income Tax Act
• Trading Stock Definition
• Participation Bonds
• Deductibility Of Expenditure
• Income-tax
• Trading-stock

Richards Bay Iron & Titanium (Pty) Ltd and Another v Commissioner for Inland Revenue (458/93)

Richards Bay Iron & Titanium (Pty) Ltd and Another v Commissioner for Inland Revenue (458/93) [1995] ZASCA 81; 1996 (1) SA 311 (SCA); (24 August 1995)

Court

Supreme Court of Appeal

Case number

458/93

Judges

Corbett, Botha, Eksteen, Howie, Marais

The Supreme Court of Appeal held that the relevant stockpiles constituted trading stock as defined in section 1 of the Income Tax Act 58 of 1962. The Court reasoned that the statutory definition deliberately extends beyond colloquial usage to include items produced or manufactured for purposes of manufacture, regardless of their saleability or market value in their current state. The cost price of such stockpiles, including further costs incurred in bringing them to their existing condition and location, must be taken into account in determining taxable income under section 22. The Court reje…

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• Income Tax Assessment
• Trading Stock Definition
• Work In Progress Valuation
• Cost Price Determination