[Company name]
TAX2601 Assignment
3 Semester 2 2024 -
DUE 2 September
2024
QUESTIONS WITH ANSWERS
, TAX2601 Assignment 3 Semester 2 2024 - DUE 2 September 2024
QUESTION 1 (12 marks)
Easy Elevators (Pty) Ltd’s (“EE”) core business is the maintenance of elevators in
residential and commercial buildings in the Gauteng region. It has service agreements
with each of its customers and in terms of these, a monthly maintenance fee of R15 000
is payable on or before the seventh (7th) day of each month before that month’s service
occurs. EE is a company incorporated in South Africa and its year of assessment ends
on 31 March. One of EE’s customers paid an amount of R45 000 into EE’s bank
account on 7 March 2024. This amount is for the maintenance service fees in respect of
the following three months i.e. March 2024 to May 2024. EE was informed by the
customer that the building’s caretaker decided to pay three months’ fee upfront as he
would be out of the country for an extended period and wanted to ensure the
maintenance of the elevators would continue as usual during this time. REQUIRED
MARKS Discuss whether the receipt of the R45 000 maintenance service fee would
constitute gross income of Easy Elevators (Pty) Ltd as defined in the Income Tax Act 58
of 1962 for the year of assessment ending 31 March 2024. List all the gross income
definition requirements, discuss each one and briefly refer to case law to strengthen
your argument. 12 4 TAX2601/2024/Semester 2/Assessment 3
To address whether the receipt of R45,000 would constitute gross income for Easy
Elevators (Pty) Ltd (EE) for the year ending 31 March 2024, let's analyze this scenario
based on the definition of "gross income" under the South African Income Tax Act 58 of
1962, and relevant case law.
Definition of Gross Income
Section 1 of the Income Tax Act defines gross income as:
TAX2601 Assignment
3 Semester 2 2024 -
DUE 2 September
2024
QUESTIONS WITH ANSWERS
, TAX2601 Assignment 3 Semester 2 2024 - DUE 2 September 2024
QUESTION 1 (12 marks)
Easy Elevators (Pty) Ltd’s (“EE”) core business is the maintenance of elevators in
residential and commercial buildings in the Gauteng region. It has service agreements
with each of its customers and in terms of these, a monthly maintenance fee of R15 000
is payable on or before the seventh (7th) day of each month before that month’s service
occurs. EE is a company incorporated in South Africa and its year of assessment ends
on 31 March. One of EE’s customers paid an amount of R45 000 into EE’s bank
account on 7 March 2024. This amount is for the maintenance service fees in respect of
the following three months i.e. March 2024 to May 2024. EE was informed by the
customer that the building’s caretaker decided to pay three months’ fee upfront as he
would be out of the country for an extended period and wanted to ensure the
maintenance of the elevators would continue as usual during this time. REQUIRED
MARKS Discuss whether the receipt of the R45 000 maintenance service fee would
constitute gross income of Easy Elevators (Pty) Ltd as defined in the Income Tax Act 58
of 1962 for the year of assessment ending 31 March 2024. List all the gross income
definition requirements, discuss each one and briefly refer to case law to strengthen
your argument. 12 4 TAX2601/2024/Semester 2/Assessment 3
To address whether the receipt of R45,000 would constitute gross income for Easy
Elevators (Pty) Ltd (EE) for the year ending 31 March 2024, let's analyze this scenario
based on the definition of "gross income" under the South African Income Tax Act 58 of
1962, and relevant case law.
Definition of Gross Income
Section 1 of the Income Tax Act defines gross income as:
