TAX3701 Assignment 2 (COMPLETE ANSWERS) Semester 2 2025 - DUE 18 September 2025; 100% correct solutions and explanations.

TAX3701 Assignment 2 (COMPLETE ANSWERS) Semester 2 2025 - DUE 18 September 2025; 100% correct solutions and explanations.TAX3701 – Assessment 2 Instructions Assessment Title: Written Assessment Total Marks: 80 marks Opening Date: Monday, 1 September 2025 at 08:00 Closing Date: Thursday, 18 September 2025 at 23:00 Important Information: • This assessment contributes 75% of your year mark for the TAX3701 module. • The year mark contributes 20% towards your final module mark. • Strict adherence to the submission deadline is required. o No extensions will be granted under any circumstances. o Scripts received after the deadline will not be marked. Submission Guidelines: • Submit your assessment online via the myModules submission portal. • Emailed submissions will not be accepted or marked. • Your assessment must be submitted as a single PDF document. • Ensure your file is legible, properly formatted, and includes all required answers. Additional Notes: • Read all instructions and questions carefully before attempting the assessment. • Ensure that your work is your own. Plagiarism and academic dishonesty will not be tolerated. • Manage your time effectively to complete and submit the assessment before the deadline. Should you require any clarification on the assessment content, please use the course mailbox to email the TAX3701 lecturers well in advance of the closing date. QUESTION 1 (10 marks, 18 minutes) Moses Patel (Pty) Ltd (MP) is a company that sells animal feed to farmers and operates from Winterton in KwaZulu-Natal Free-State. The company also has a few specialists that assists the farmers with cost effective improvements of feeding supplements for their life stock. This commercial knowledge (know-how payments) passed to the farmers has proven to be very profitable. The company’s year of assessment ends on 28 February 2025 and is a registered VAT vendor making only taxable supplies. On 27 September 2024, MP received an amount of R95 000 in cash from a big commercial farmer in KwaZulu-Natal for the service rendered by the company’s newly appointed animal feeding supplement specialist. REQUIRED: MARKS Discuss, whether the amount of R95 000 received by Moses Patel (Pty) Ltd will be regarded as gross income as defined in the Income Tax Act for the 2025 year of assessment, supported with