TAX2601 – Assessment 3
Student number – 15748952
Question 1
a. We must take consideration of the conditions
of the gross income definition in order to
decide whether the R900 sale of the blue high
heel shoes will qualify as gross income for
Buy-a-lot (Pty) Ltd during the 2024 year of
assessment.
Income has to be accrued or received. It
cannot be both. In this instance, this criteria
is satisfied if the R900 from the sale of the
shoes has been received or is scheduled to
be paid.
Realization: Since income is obtained
through the sale of goods or services, it must
be realized. For Buy-a-lot (Pty) Ltd., the sale
of the blue high heel shoes symbolizes the
realization of income.
Regularity: The source of revenue should be
recurring and regular. This criteria would be
satisfied by the R900 from the sale of the blue
high heel shoes if Buy-a-lot (Pty) Ltd regularly
sells shoes as part of its company
operations.
Case Law Citation: CIR v. Cadac (Pty) Ltd. is a
relevant decision to take into consideration.
In this case, it was decided that revenue
received from the sale of products in the
regular course of business is considered
gross income.
In conclusion, the R900 sale of the blue high
heel shoes is probably going to be
considered gross income for Buy-a-lot (Pty)
Ltd for the 2024 assessment year, given the
information provided, and meeting the
requirements of accrual or receipt,
realization, and regularity.
Student number – 15748952
Question 1
a. We must take consideration of the conditions
of the gross income definition in order to
decide whether the R900 sale of the blue high
heel shoes will qualify as gross income for
Buy-a-lot (Pty) Ltd during the 2024 year of
assessment.
Income has to be accrued or received. It
cannot be both. In this instance, this criteria
is satisfied if the R900 from the sale of the
shoes has been received or is scheduled to
be paid.
Realization: Since income is obtained
through the sale of goods or services, it must
be realized. For Buy-a-lot (Pty) Ltd., the sale
of the blue high heel shoes symbolizes the
realization of income.
Regularity: The source of revenue should be
recurring and regular. This criteria would be
satisfied by the R900 from the sale of the blue
high heel shoes if Buy-a-lot (Pty) Ltd regularly
sells shoes as part of its company
operations.
Case Law Citation: CIR v. Cadac (Pty) Ltd. is a
relevant decision to take into consideration.
In this case, it was decided that revenue
received from the sale of products in the
regular course of business is considered
gross income.
In conclusion, the R900 sale of the blue high
heel shoes is probably going to be
considered gross income for Buy-a-lot (Pty)
Ltd for the 2024 assessment year, given the
information provided, and meeting the
requirements of accrual or receipt,
realization, and regularity.
