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Gross Income Elements - Coggle Diagram
Gross Income Elements
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(A) and (B) In the year of assessment, the total amount in cash or otherwise
- Butcher Brothers Court Case - The word "amount" refers to an amount with a determinable value. The onus is on SARS to determine the amount and if no amount can be determined, there will be no gross income.
- Brummeria Renaissance Court Case - An amount does not have to be able to be turned into money by the taxpayer for it to be an amount for the purposes of the gross income definition. The amount merely has to be in the form of an asset which could be turned into money if it were to be sold. If a taxpayer has a right to an interest-free loan, such a right has value and will therefore be considered an amount for the purposes of the gross income definition.
- Lategan Court Case - The term "amount" must be given a broader meaning and must not only include money but must also any form of property that is earned by the taxpayer and which has an ascertainable monetary value, including debts and rights.
(C) Received by, accrued to or in favour of
Accrual
- Witwatersrand Association of Racing Clubs Court Case - An amount accrues to a taxpayer if the taxpayer has no legal obligation to pay it over to another person; only a moral obligation should exist. Furthermore, one income has accrued to a taxpayer, its subsequent disposal is irrelevant
- Mooi Court Case - Accrued to = unconditionally entitled to the amount. An amount has not accrued to a taxpayer if it is dependent on a future event.
- People's Stores Court Case - Accrual means the taxpayer has become entitled to the amount on the date of sale. This therefore concludes that accrued to = entitled to and a taxpayer does not have to receive money in order to be entitled to it. The specific amount that has accrued to the taxpayer should be included in gross income at face value and not discounted value, and should be taxed at the earlier of receipt or accrual.
- Lategan Court Case - Accrued to means entitled to and all amounst accrued to a taxpayer will form part of gross income.
Receipt
- MP Finance Group Court Case - A bilateral receipt (the other party willingly gives you the money) that is used for the taxpayer's own intention means it has been received by the taxpayer. These receipts should be included in gross income regardless of their legality because they are still considered as amounts received by the taxpayer. Unilateral receipts such as theft will not usually be included in gross income as they are not necessarily classified as receipts.
- Pyott Ltd Court Case - Generally deposits are still received and form part of gross income. A deposit in only treated as not being received if the money for the deposit is kept separately in a trust account, solely for the customer's benefit. If deposits are kept within the same account as the receipts related to trade, the deposits are then revenue in nature and are viewed to be arising in the ordinary course of trade.
- Geldenhuys Court Case - An amount is included in gross income by a taxpayer only if it is received by him on his own behalf for his own benefit.
- ITC 24510 Court Case - An amount connected to a gift card will only be included in gross income by a taxpayer once the amount has been redeemed or has expired as this is when it becomes received by the taxpayer.
- Delagoa Bay Cigarettes Court Case - The legality of the income received by the taxpayer is irrelevant; all amounts will continue to form part of gross income.
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