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Deductions - Coggle Diagram
Deductions
Actually Incurred
Nasionale Pers Bpk v KBI
Principle-if a 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
CIR v Edgars Stores Ltd
Principle-An expense can only be deducted once there is an
unconditional legal obligation to pay the expense
Goldeen Dumps Pty(Ltd)
Principle-Where an obligation to pay an amount is in dispute,the expense can only be deducted when the dispute has been finalised.
CIR v Labat
Principle-Shares issued for acquiring an asset = Section 40CA
determines the deemed expenditure incurred amount.Shares issued for services rendered = No expenditure incurred
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Not of Capital Nature
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BPSA
Principle-The legal categorisation of a payment does not determine
whether it is capital or revenue, but rather the purpose of the
expenditure.
Rand Mines
Principles-Expenditure incurred to obtain an income earning right or
structure will be capital in nature
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Flemming
Principle-The expenditure incurred must be as a result of damage or the
need to repair an asset that has been subject to use,in order
to be classified as a repair. The cost must maintain the
income earning ability of the asset,notimprove it.