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Gross Income Case Law (Not of a capital nature (Change in intention (Natal…
Gross Income Case Law
Not of a capital nature
Intention
Elandsheuwel Farming: mere decision to sale asset of capital nature does not mean change in intention has occurred; make inquiring to determine whether TP was merely:
- realizing capital asset to best advantage OR
- using asset as stock-in-trade in profit making scheme
Richmond Estates: company's initial intention indicated by MOI, actions of directors & type of business
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Scheme of profit making
Pick & Pay Employee Share Purchase trust: money received other than in scheme of profit making = capital
Change in intention
Natal Estates: may realise an asset to best advantage but should be careful not to cross the Rubicon (e.g. development, marketing)
Nussbaum: secondary purpose can taint primary purpose, consider frequency
Berea West Estates: using realization company to realise capital asset merely means disposal of asset to best advantage; receipts of realization company = capital in nature
John Bell: may realise property to best advantage; profit not necessarily indication of change in intention
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Other
Legality
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MP Finance Group: even if receipts are illegal, still received → GI
Damages & Compensation
WJ Fourie Beleggings: compensation for damages of capital nature = capital; compensation for loss of profit = revenue
Stellenbosch Farmers Winery: accounting treatment cannot override correct interpretation & application of Act
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