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Court Cases - Coggle Diagram

- - - - Principles
        
        An expense must be deducted in the year of assessment that it is incurred, even if it will only produce income in future years
        
        An expense has to be claimed in the year that it incurred. It can not be claimed in later years
    - - Principle
        
        An expense can only be deducted in year of assessment the expense was actually incurred
  - - - Principle
        
        If payment is contingent upon the happening of an uncertain future event, the expense and corresponding liability can only be actually incurred once the conditions are met,
    - - Principle
        
        An expense can only be deducted once there is an unconditional legal obligation to pay the expense
    - - Principle
        
        Where an obligation to pay an amount is in dispute, the expense can only be actually incurred when the dispute is settled with regards to the obligation and the amount thereof
    - - Principle:
        
        An expense is deemed to be incurred by the company where it issues shares as consideration for acquiring an asset
        
        Shares issued for services rendered = not expenditure incurred
  - - - Cost of establishing/improving/ adding income earning plant is capital in nature therefore not deductible
        
        Cost of performing income earning operations which is revenue in nature therefore deductible
    - - expenditure incurred to obtain income earning right or structure will be capital in nature
    - - The legal categorization of a payment doe not determine whether it is capital or revenue in nature but rather the purpose of the expenditure
  - - - If something is not inevitable concomitant of business operations it is not deductible
    - - Principle:
        
        Link between expense and production of income
        What is the purpose of the expense and how closely connected is that expense to production of income
    - - Recurring payments for mantaining income earning operations are deductible
    - - Expenditure incurred to induce the employees to enter and remain in the service of the taxpayer may qualify as a deduction since the purpose is to produce current or future income
    - - Principles
        
        :
        
        Incurring audit fees is necessarily attached to the performance of the taxpayer's income earning operations
    - - !
        
        Principle
        
        Assess the closeness of the connection of expenditure incurred and exempt income received or accrued.
        *Apportion taxable income and exempt income
- - - - Trade’ must be given a wide interpretation