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Case Law: General Deductions - Coggle Diagram
Case Law: General Deductions
Trade
Trade carried out
Income generated from trade
Positive Test
Expenditure & Losses
Actually incurred
During yr of assessment
In production of income
Not capital in nature
Burgess vs CIR
A wide intepretation given to trade
Joffee & Co
Not deductible if not inevitable concomitant
Sub Nigel Ltd
Expense claimed in year incurred, no later
Scribante Constructions
Borrowing money and re=lending is a trade
Port Elizabeth Electric Tramway
Legal costs not part of income production
Nasionale Pers BPK
Conditions must be met if payment is contingent before expense can be incurred
Edgars Stores
Expense deducted only if legal obligation to pay expense
Golden Dumps (Pty) Ltd
If a dispute, expense only occurs when dispute is settled
BP Southern Africa
Recurring payments for maintaining income are deductible
Royalty payments are revenue in nature & deductilbe if used in production of income
Mobile Telephone Networks Holdings (Pty) Ltd
Apportion if fees are for dual purpose
Audit fees are incurred in the production of income
New State Areas Ltd
Fixed capital Not deductible
Floating capital deductible
