TAX26021
Assignment 1 Semester 2 2025
2 2025
Unique Number:
Due date: 8 September 2025
QUESTION 1
According to section 1 of the Income Tax Act, gross income for a resident includes:
“The total amount, in cash or otherwise, received by or accrued to or in favour of such
resident during the year of assessment, excluding amounts of a capital nature.”
Application of Gross Income Criteria
1 Total amount in cash or otherwise
✔ Yes – The company received R4 300 000 in cash, which qualifies as a “total amount” as
per CIR v Butcher Bros (Pty) Ltd 13 SATC 21, where the court confirmed that money or
ascertainable money value must be considered.
DISCLAIMER & TERMS OF USE
Educational Aid: These study notes are intended to be used as educational resources and should not be seen as a
replacement for individual research, critical analysis, or professional consultation. Students are encouraged to perform
their own research and seek advice from their instructors or academic advisors for specific assignment guidelines.
Personal Responsibility: While every effort has been made to ensure the accuracy and reliability of the information in
these study notes, the seller does not guarantee the completeness or correctness of all content. The buyer is
responsible for verifying the accuracy of the information and exercising their own judgment when applying it to their
assignments.
Academic Integrity: It is essential for students to maintain academic integrity and follow their institution's policies
regarding plagiarism, citation, and referencing. These study notes should be used as learning tools and sources of
inspiration. Any direct reproduction of the content without proper citation and acknowledgment may be considered
academic misconduct.
Limited Liability: The seller shall not be liable for any direct or indirect damages, losses, or consequences arising from
the use of these notes. This includes, but is not limited to, poor academic performance, penalties, or any other negative
consequences resulting from the application or misuse of the information provided.
, For additional support +27 81 278 3372
QUESTION 1
According to section 1 of the Income Tax Act, gross income for a resident includes:
“The total amount, in cash or otherwise, received by or accrued to or in favour of
such resident during the year of assessment, excluding amounts of a capital
nature.”
Application of Gross Income Criteria
1 Total amount in cash or otherwise
✔ Yes – The company received R4 300 000 in cash, which qualifies as a “total
amount” as per CIR v Butcher Bros (Pty) Ltd 13 SATC 21, where the court confirmed
that money or ascertainable money value must be considered.
2 Received by, accrued to, or in favour of the taxpayer
✔ Yes – The amount was received on 1 March 2025, therefore it accrued during the
year of assessment ending 31 March 2025. According to CIR v People's Stores
(Walvis Bay) (Pty) Ltd 52 SATC 9, an amount accrues when the taxpayer becomes
unconditionally entitled to it.
3 During the year of assessment
✔ Yes – The year of assessment is from 1 April 2024 to 31 March 2025, and the
amount was received on 1 March 2025, thus falling within the correct tax year.
4 Excluding amounts of a capital nature
✘ No – This is the key issue: the amount is of a capital nature.
Assignment 1 Semester 2 2025
2 2025
Unique Number:
Due date: 8 September 2025
QUESTION 1
According to section 1 of the Income Tax Act, gross income for a resident includes:
“The total amount, in cash or otherwise, received by or accrued to or in favour of such
resident during the year of assessment, excluding amounts of a capital nature.”
Application of Gross Income Criteria
1 Total amount in cash or otherwise
✔ Yes – The company received R4 300 000 in cash, which qualifies as a “total amount” as
per CIR v Butcher Bros (Pty) Ltd 13 SATC 21, where the court confirmed that money or
ascertainable money value must be considered.
DISCLAIMER & TERMS OF USE
Educational Aid: These study notes are intended to be used as educational resources and should not be seen as a
replacement for individual research, critical analysis, or professional consultation. Students are encouraged to perform
their own research and seek advice from their instructors or academic advisors for specific assignment guidelines.
Personal Responsibility: While every effort has been made to ensure the accuracy and reliability of the information in
these study notes, the seller does not guarantee the completeness or correctness of all content. The buyer is
responsible for verifying the accuracy of the information and exercising their own judgment when applying it to their
assignments.
Academic Integrity: It is essential for students to maintain academic integrity and follow their institution's policies
regarding plagiarism, citation, and referencing. These study notes should be used as learning tools and sources of
inspiration. Any direct reproduction of the content without proper citation and acknowledgment may be considered
academic misconduct.
Limited Liability: The seller shall not be liable for any direct or indirect damages, losses, or consequences arising from
the use of these notes. This includes, but is not limited to, poor academic performance, penalties, or any other negative
consequences resulting from the application or misuse of the information provided.
, For additional support +27 81 278 3372
QUESTION 1
According to section 1 of the Income Tax Act, gross income for a resident includes:
“The total amount, in cash or otherwise, received by or accrued to or in favour of
such resident during the year of assessment, excluding amounts of a capital
nature.”
Application of Gross Income Criteria
1 Total amount in cash or otherwise
✔ Yes – The company received R4 300 000 in cash, which qualifies as a “total
amount” as per CIR v Butcher Bros (Pty) Ltd 13 SATC 21, where the court confirmed
that money or ascertainable money value must be considered.
2 Received by, accrued to, or in favour of the taxpayer
✔ Yes – The amount was received on 1 March 2025, therefore it accrued during the
year of assessment ending 31 March 2025. According to CIR v People's Stores
(Walvis Bay) (Pty) Ltd 52 SATC 9, an amount accrues when the taxpayer becomes
unconditionally entitled to it.
3 During the year of assessment
✔ Yes – The year of assessment is from 1 April 2024 to 31 March 2025, and the
amount was received on 1 March 2025, thus falling within the correct tax year.
4 Excluding amounts of a capital nature
✘ No – This is the key issue: the amount is of a capital nature.
