Tax Law: Gross Income Cases

• Court cases must meet specific criteria to be included, such as clarifying terminology in the Income Tax Act and VAT Act, or changing the interpretation of tax provisions.
• New cases must be Supreme Court of Appeal cases, adhering to ratio decidendi principles.
• Academics decide which cases to use as teaching aids; marks are awarded for the case name, principle, and its application.

Gross Income (s1(1)) Cases

• Resident:
  • Cohen v CIR
  • CIR v Kuttel
• Amount:
  • C:SARS v Brummeria Renaissance (Pty) Ltd
  • CIR v Butcher Bros (Pty) Ltd
• From a source within the Republic:
  • CIR v Lever Brothers and Unilever Ltd
• Accrued to:
  • CIR v People’s Stores (Walvis Bay) (Pty) Ltd
  • CIR v Witwatersrand Association of Racing Clubs
  • CIR v Lategan
  • Mooi v SIR
• Received by:
  • Geldenhuys v CIR
  • MP Finance Group CC (In Liquidation) v C:SARS
  • Pyott Ltd v CIR
  • ITC24510
• Of a capital nature – intention of company:
  • C:SARS v Capstone 556 (Pty) Ltd (excluding transaction/scheme details)
• Of a capital nature – scheme of profit-making:
  • CIR v Pick ‘n Pay Employee Share Purchase Trust
• Of a capital nature – mixed or dual intention:
  • CIR v Stott
  • CIR v Nel
• Of a capital nature – change in intention:
  • CIR v Nussbaum
  • Natal Estates Ltd v SIR
  • C:SARS v Founders Hill (Pty) Ltd
  • John Bell & Co (Pty) Ltd v SIR
• Of a capital nature – the nature of the ‘asset’:
  • Visser
  • CIR v George Forest Timber Co Ltd
  • CIR v Nel
• Damages and compensation:
  • WJ Fourie Beleggings v C:SARS
  • Stellenbosch Farmers’ Winery Limited v C:SARS (25 May 2012)
• The legality or otherwise of the business productive of income:
  • CIR v Delagoa Bay Cigarette Co Ltd
  • MP Finance Group CC (in liquidation) v C:SARS

Section 11(a) Cases

• Requirements in general and if income must be earned in the same year:
  • Sub-Nigel Ltd v CIR
• Carrying on a trade:
  • Burgess v CIR
  • C:SARS v Scribante Construction (Pty) Ltd
• In the production of income:
  • Port Elizabeth Electric Tramway Co Ltd v CIR
  • Joffe & Co (Pty) Ltd v CIR
  • C:SARS v BP South Africa (Pty) Ltd
  • BP Southern Africa (Pty) Ltd v CSARS (2007)
  • Provider v COT
  • CSARS v Mobile Telephone Networks Holdings (Pty) Ltd
• Expenditure actually incurred:
  • Edgars Stores Ltd v CIR
  • Nasionale Pers Bpk v KBI
  • CIR v Golden Dumps (Pty) Ltd
• Not of a capital nature:
  • New State Areas Ltd v CIR
  • Rand Mines (Mining & Services) Ltd v CIR
  • CSARS v BP South Africa (Pty) Ltd (2006)

Terminology/Concepts Clarification Cases

• Section 7:
  • "by reason of"/"gratuitousness" - CIR v Berold, C:SARS v Woulidge (2002 decision)
• Section 11(d):
  • "repair" - Flemming v KBI, CIR v African Products Manufacturing Co Ltd
• Section 20:
  • "carrying on of trade" - SA Bazaars (Pty) Ltd v CIR, Robin Consolidated Industries v CIR
• Section 22:
  • "trading stock"/"decrease in market value" - Ernst Bester Trust v C:SARS, C:SARS v Volkswagen SA (Pty) Ltd (2018)
• Section 23(g):
  • "for purposes of trade" - Warner Lambert SA (Pty) Ltd v C:SARS
• Section 23H:
  • "benefit extends beyond year of assessment" - Telkom SA SOC Limited v C:SARS (2020)
• Seventh Schedule (par 2(e) or (h)):
  • “private benefit/use” - BMW South Africa (Pty) Ltd v CSARS
• VAT:
  • Recoveries - C:SARS v British Airways PLC
• Apportionment:
  • Capitec Bank (Pty) Ltd v CSARS