Tax Court: 2019-2017 - South African Revenue Service

The judgments delivered in the Tax Court on this page are arranged per year and then per date of delivery.

Tax Court judgments delivered in another year, can be accessed through the navigation pane above.

2019
Date of Delivery	Case Number	Applicable Legislation	Keywords
19 December 2019	IT 24819	Income Tax Act, 1962 Tax Administration Act, 2011	Income tax; loan; whether the Appellant was liable for a late payment penalty for payroll taxes under paragraph 6(1) of the Fourth Schedule
15 November 2019	VAT 2063	Value-Added Tax Act, 1991	Section 17(1) and proviso (iii); vendor making both exempt and taxable supplies in course of conducting enterprise of, amongst others, providing money-transfer services and mobile phone credit and bureau de change services; vendor consequently having mixed-purpose input tax deductions requiring apportionment under section 17; whether vendor entitled to retrospective permission to use the transaction count based (TCB) method as opposed to the default standard turnover based (STB) method prescribed in Binding General Ruling 16
15 November 2019	IT 24614	Income Tax Act, 1962	Income tax; loan; whether the Appellant was entitled to a deduction for what SARS regarded as a loan
7 November 2019	IT 14157	Income Tax Act, 1962	Income tax; independent contractor; whether the Appellant was an independent contractor that was not obliged to deduct SDL & PAYE
17 September 2019	IT 13798, IT 13931 and TAdm 14294	Income Tax Act, 1962 Tax Administration Act, 2011	Tax Court; capital gains tax and capital losses; employee share incentive scheme and trust; meaning of “asset” as defined in the Eighth Schedule and whether that definition includes a personal right
11 September 2019	035/2019	Tax Administration Act, 2011	Default judgment; whether the Appellant was entitled to default judgment against the Respondent
26 August 2019	IT 4412	Income Tax Act, 1962	Income tax; medical expenditure; whether the Appellant was entitled to claim certain medical expenditure
6 August 2019	IT 13862 and VAT 1374	Income Tax Act, 1962 Tax Administration Act, 2011 Value-Added Tax Act, 1991	Amendment; whether the Respondent was allowed to amend its Rule 31 Statements
9 July 2019	IT 14255	Income Tax Act, 1962	Income tax; Organ of State; whether the Appellant was exempt from tax under section 10(1)
28 June 2019	IT 14434/2019	Income Tax Act, 1962	Income tax; section 13quin; building allowance; whether the Appellant was entitled to a building allowance in the tax year claimed
19 June 2019	VAT 1610	Value-Added Tax Act, 1991	Value-added tax; input tax; output tax; whether the Appellant was entitled to input tax and output tax claims relating to reorganising loans and substituting foreign loans; input tax; output tax; whether the Appellant was entitled to input tax and output tax claims relating to reorganising loans and substituting foreign loans
12 June 2019	IT 14287	Income Tax Act, 1962	Income tax; whether the Appellant is liable for tax under section 64 of the Income Tax Act
3 May 2019	TAdm 24643	Tax Administration Act, 2011	Tax administration; section 223; imposition of understatement penalty of 100%; SARS’s grounds of assessment under rule 31; whether such statement lacked sufficient averments necessary to sustain a finding of gross negligence
3 May 2019	TAdm 00052/2018	Tax Administration Act, 2011	Section 99(1)(a) read with section 99(2) Assessment made more than three years after date of original assessment to tax capital gain previously disclosed as income; application for order requiring SARS to provide reasons for assessment in order to enable applicant to formulate its objection to additional assessment; Court holding that not only must SARS show that there was non-disclosure of material facts during the three-year period but that such non-disclosure caused SARS not to tax the relevant amount in the original assessment or during the three years thereafter; Court finding that reasons given in finalisation of audit letter insufficient but that such shortcoming rectified in SARS’s answering affidavit.
17 April 2019	IT 24510	Income Tax Act, 1962	Income tax; whether revenue from the sale of gift cards constitutes gross income
27 February 2019	13868	Income Tax Act, 1962	Income tax; lease; whether the Appellant was entitled to a postponement and condonation for filing its appeal
31 January 2019	14106	Income Tax Act, 1962	Income tax; whether the taxpayer was entitled to be a PBO and be allowed a tax exemption under section 10(1)

2018
Date of Delivery	Case Number	Applicable Legislation	Keywords
20 December 2018	14189	Income Tax Act, 1962	Income tax; lease; whether a lease premium is of a capital or revenue nature
13 December 2018	14426	Employment Tax Incentive Act, 2013 Labour Relations Act, 1995	Employment tax incentive; whether the Appellant was entitled to an employment tax incentive deduction
19 November 2018	IT 24462	Income Tax Act, 1962; Tax Administration Act, 2011	Income Tax Act 58 of 1962, sections 24I and 23H; Tax Administration Act 28 of 2011, sections 221 and 222; appellant making loans to group company conducting business in foreign country; such loans denominated in USD; appellant disposing of loan at huge commercial loss; whether appellant entitled to such loss based on the interpretation of section 24I(10); Court finding that appellant not so entitled and instead taxable on foreign exchange gain; whether appellant entitled to deduction in respect of cash incentive bonus payments in full under section 11(a) or whether such payments should be deducted over a period under section 23H; Court finding that the deduction of the bonuses did not have to be spread; whether appellant should be subject to understatement penalties in respect of the exchange loss incorrectly claimed; Court concluding that appellant had committed a bona fide inadvertent error, having relied on the opinions of senior counsel, and that penalty should not have been imposed
5 December 2018	VAT 1558	Value-Added Tax Act, 1991	Value-added tax; promotional products; advertising and promotional products; whether the Appellant was liable for VAT under section 8(15) on certain promotional products for advertising and promotional services
1 November 2018	13988	Income Tax Act, 1962	Income tax; section 24C; loyalty programme; whether the Appellant was entitled to a section 24C allowance in respect of a loyalty programme it administered
11 July 2018	TAdm 14294	Tax Administration Act, 2011	Tax Administration; exception; Rule 32 Statement
6 July 2018	13879	Income Tax Act, 1962 Tax Administration Act, 2011	Income tax; Tax Administration; Under-declaration of gross income
17 May 2018	13626	Income Tax Act, 1962	Income tax; trading stock; whether there was a diminution in value of the Appellant’s trading stock for the relevant years of assessment
16 May 2018	13251 and VAT 1077	Income Tax Act, 1962 Value-Added Tax Act, 1991	Income tax & VAT; full bench (3 judges) of the Tax Court i.t.o section 118(5) of the TAA; estimated assessments based on extrapolation of 7 month data; Commissioner concedes that the amount of assessments needs to be reduced prior to appeal hearing commencing without altering the assessments accordingly; under-declaration of income and turnover through the intentional manipulation of taxpayer’s point of sales system (POS); additional tax 200%
9 March 2018	14218	Income Tax Act, 1962 Companies Act, 2008	Income tax; section 1; foreign income Companies Act; section 23
13 February 2018	IT 13726	Income Tax Act, 1962 Tax Administration Act, 2011	Income tax; farming expenses; retrenchment Tax administration; audit
8 February 2018	IT 13725 and VAT 1426 IT 13727 and VAT 1096	Tax Administration Act, 2011	Tax administration; understatement penalties; gross negligence; tax returns

2017
Date of Delivery	Case Number	Applicable Legislation	Keywords
30 November 2017	13863	Income Tax Act, 1962	Income tax; sections 1 and 15; contract mining
20 November 2017	14055	Income Tax Act, 1962	Income tax; section 11(a); section 18A; section 23(g); deductions; whether SARS was correct in disallowing corporate social expenditure claimed
3 November 2017	IT 14240	Income Tax Act, 1962	Income tax; deduction; future expenditure on contracts; allowance for section 24C; Whether Appellant entitled to claim allowance for such expenditure under section 24C of Income Tax Act 58 of 1962
17 October 2017 New!	IT 0122/2017	Tax Administration Act, 2011	Tax administration; section 129(2)(b); Rules 31 and 56; SARS raising additional assessments on taxpayer; SARS failing to lodge its rule 31 statement of grounds of assessment within required period despite repeated extensions by taxpayer; Taxpayer applying to court under rule 56 for default judgment; SARS requesting condonation for late filing of its answering affidavit; SARS contending that Cape Town tax court did not have jurisdiction to hear the matter; court refusing to condone late filing of answering affidavit and ordering that assessments be reduced under section 129(2)(b); Court rejecting SARS’s contention that it did not have the jurisdiction to hear the matter; costs awarded against SARS
18 August 2017	IT 14247	Tax Administration Act, 2011	Income tax; value-added tax; understatement penalty; whether the Respondent was entitled to levy understatement penalties against the Appellant for both VAT and income tax
14 August 2017	IT 14036 Case number corrected on 27/11/2019	Income Tax Act, 1962	Income tax; section 79(1); deemed dividend; secondary tax on companies (STC); whether SARS is precluded from raising an original assessment (‘the STC assessment’) on the taxpayer for secondary tax on companies (‘STC’) when it purported to do so
6 July 2017	13539/13673	Income Tax Act, 1962	Income tax; section 22 (1)(1); trading stock; whether the Appellant was entitled to exclude certain amounts from its trading stock under section 22(1)(a) of the Income Tax Act
30 June 2017	13065/13	Income Tax Act, 1962	Income tax; section 9D; whether amounts fall to be included in the Appellant’s income for the purposes of section 9D of the Income Tax Act
30 June 2017	0032/2016 & 0033/2016	Tax Administration Act; 2011	Rule 6 of Tax Court rules; application for reasons for assessment; what constitutes sufficient reasons
30 May 2017	14005	Income Tax Act, 1962	Income tax; section 1; section 24(1); proceeds from sale of property; accrual; Silverglen; whether the Appellant became entitled to the proceeds from the sale of property under section 1 by way of accrual, alternatively, section 24(1) of the Income Tax Act
20 April 2017	13671	Income Tax Act, 1962	Income tax; section 11(a); loss in the production of income; whether the Appellant was entitled to claim a loss for R90 million in terms of a contract as deductible expenditure under section 11(a) of the Income Tax Act
30 March 2017	13686	Income Tax Act, 1962	Income tax; section 15 (1)(a); contract miner; mining operations; whether the Appellant was entitled to claim a deduction for mining operations as a contract miner under section 15(1)(a) of the Income Tax Act
1 March 2017	13492	Income Tax Act, 1962 Tax Administration Act, 2011	Income tax; sections 64, 64B and C; prescription; secondary tax on companies Tax administration; sections 99(1) and 99(2)
24 March 2017	IT 13974 and 13993	Transfer Duty Act, 1949	Transfer duty; sale agreement; whether the transfer duty payable by the Appellants was in respect of a divisible or indivisible sale agreement
1 March 2017	13695	Income Tax Act, 1962	Income tax; gross income, capital income; whether the Respondent was correct in adjusting the taxpayer’s gross income to include income which the Appellant alleged was of a capital nature
22 February 2017	13193	Income Tax Act, 1962	Income tax; sections 1 and 24J; rights to dividends
30 January 2017 New!	IT 13950	Tax Administration Act, 2011	Tax administration; Rule 31 interlocutory application; Applicant having disposed of pre-valuation date shares in two companies, adopted market value on valuation date in determining the base costs of the shares; SARS not satisfied with applicant’s valuation, raising additional assessment reflecting a lower base cost and higher capital gain; applicant lodging objection; SARS issuing its statement of grounds of assessment contending for an even higher capital gain based on revised valuation assumptions; whether such revised assumptions are a novation of the whole of the factual or legal basis of the disputed assessment requiring further additional assessment under rule 31(3); court finding that SARS’s revised assumptions did not provide the factual or legal basis for the assessment, and hence did not comprise a novation; court further finding that it was unnecessary for SARS to issue a further additional assessment; in the result the application was dismissed with each party bearing its own costs
27 January 2017	0018/2016	Income Tax Act, 1962	Income tax; section 107(2); condonation; late appeal; whether the Appellant was entitled to condonation for the late filing of its appeal under section 107(2) of the Income Tax Act

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