TAX2601
Assignment 1 Semester 2 2022
Unique #:
This document includes:
• Helpful guidelines
• Explanations and/ or calculations
• Study-guide and /or text book references were
necessary Solutions
Terms of use:
• To be used ONLY for comparison purposes.
Do not duplicate or distribute without written permission from the author
, TAX2601
ASSIGNMENT 3
SEMESTER 2 2022
DUE DATE 6 SEPTEMBER 2022
(Q1)
Components of the general Explanation
deduction formula
Carrying on trade Manufac is carrying on a trade, i.e. manufacturing of
products.
Expenditure and losses There is an expenditure of R352 000.
Actually incurred The expenditure was actually incurred on 15 November 2021
when the agreement was concluded. The liability is
unconditional.
“Edgars stores Ltd v CIR 50 SATC 81”
During the year of assessment The expenditure was actually incurred on 15 November
2021, which falls in the 2021 year of assessment. The
expenditure was not incurred in the current year of
assessment, i.e. 2022.
In the production of income The event that gave rise to the expenditure, i.e. using ABC’s
design without permission is not an inevitable concomitant
of trade for Manufac Ltd. The event could have been
avoided. The expenditure was not incurred in the production
of income.
“Port Elizabeth Electric Tramway Company LTD v CIR 8 SATC
13”
Not of a capital nature The expenditure is not of a capital nature. The expenditure
does not create an asset or an enduring benefit.
“New State Areas LTD v CIR 14 SATC 155”
Assignment 1 Semester 2 2022
Unique #:
This document includes:
• Helpful guidelines
• Explanations and/ or calculations
• Study-guide and /or text book references were
necessary Solutions
Terms of use:
• To be used ONLY for comparison purposes.
Do not duplicate or distribute without written permission from the author
, TAX2601
ASSIGNMENT 3
SEMESTER 2 2022
DUE DATE 6 SEPTEMBER 2022
(Q1)
Components of the general Explanation
deduction formula
Carrying on trade Manufac is carrying on a trade, i.e. manufacturing of
products.
Expenditure and losses There is an expenditure of R352 000.
Actually incurred The expenditure was actually incurred on 15 November 2021
when the agreement was concluded. The liability is
unconditional.
“Edgars stores Ltd v CIR 50 SATC 81”
During the year of assessment The expenditure was actually incurred on 15 November
2021, which falls in the 2021 year of assessment. The
expenditure was not incurred in the current year of
assessment, i.e. 2022.
In the production of income The event that gave rise to the expenditure, i.e. using ABC’s
design without permission is not an inevitable concomitant
of trade for Manufac Ltd. The event could have been
avoided. The expenditure was not incurred in the production
of income.
“Port Elizabeth Electric Tramway Company LTD v CIR 8 SATC
13”
Not of a capital nature The expenditure is not of a capital nature. The expenditure
does not create an asset or an enduring benefit.
“New State Areas LTD v CIR 14 SATC 155”
