TAX2601 Assignment 3
Semester 2 2024 - DUE 2
September 2024
QUESTIONS WITH COMPLETE 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 determine whether the receipt of the R45,000 maintenance service fee
constitutes gross income for Easy Elevators (Pty) Ltd ("EE") for the year of
assessment ending 31 March 2024, we need to analyze the definition of
Semester 2 2024 - DUE 2
September 2024
QUESTIONS WITH COMPLETE 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 determine whether the receipt of the R45,000 maintenance service fee
constitutes gross income for Easy Elevators (Pty) Ltd ("EE") for the year of
assessment ending 31 March 2024, we need to analyze the definition of
