Mr. Legane

THE APPROACH BY OUR COURTS TO THE APPORTIONMENT OF EXPENDITURE IN TERMS OF SECTION 11(a) READ WITH SECTION 23 (g) OF THE INCOME TAX ACT NO 58 OF 1962

DUMISANI RICHARD NGUBANE

Submitted in fulfillment of the requirements of the degree

Of MASTER OF COMMERCE (TAXATION)

In the University of KwaZulu-Natal

Supervisor: M. Hafejee

Submitted: November, 2004

ACKNOWLEDGEMENTS

For the completion of this study, I am indebted to those people who helped me in a variety of ways. It is needless to say that it is impossible to thank all persons who have helped me in shaping my personality, philosophy of life from the tender age to the present time. This makes my task easier because it leaves me with one option of thanking those whom I know. Firstly I am highly indebted to Mr M. Hafejee, my supervisor for the interest he has shown in me and in my field of study from the time we started to work together. I wish to record my great gratitude for his generous help. I also wish to thank him for providing essential background information thus giving greater meaning, purpose and realism to the entire dissertation. Further, I also wish to thank the University of KwaZulu Natal for allowing me to use its Library facilities. By no means the least, I also wteh 'to.«express my heartfelt gratitude and my penultimate thanks to my friend, Irvin Mkhize for his encouragement and guidance towards my research.

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DECLARATION

I declare that:

THE APPORTIONMENT OF EXPENDITURE BY OUR COURTS IN TERMS OF SECTION 11(a) READ WITH SECTION 23(g) is my own work and that, ail the sources I have used or quoted have been indicated and acknowledged by means of complete references.

DUMISANI RICHARD NGUBANE NOVEMBER 2004

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PREFACE
The primary aim of a dissertation is to try to discover information that could assist in solving a particular problem at hand. The object of this dissertation is to determine the approach by our courts to apportionment of expenditure in terms

Bibliography: 1. A.G.M. Ltd v Commissioner of Taxes 2. Borstlap v Sekretaris van Bennelandse Inkomste, 1981 (4) SA 836 3. Bowden v Russel and Russel (1965) 42 TC 301 4. Building Contractor v Commissioner of Taxes (1941, SRLR, 12 SATC 182) 5. Caltex Oil (SA) Ltd v SIR 1975 SA 665 (A), 37 SATC 1 6. CIR v African Greyhound Racing Association (Pty) Ltd, 13 SATC 259, 1945 TPD344 7. CIR v African Oxygen, Ltd 1963 (1) SA 681 8. CIR v Delfos 1933 AD 242 9. CIR v Genn & Co (Pty) Ltd, 1955 (3) SA 293 (A), 20 SATC 113 10. CIR v Golden Dumps (Pty) Ltd 11. CIR v Nemojim (Pty) Ltd 1983 (4) SA 935 (A), 45 SATC 241 12. CIR v Scott 1928 AD 252, 3 SATC 253 13. CIR v Stellenbosch Farmers ' Winner/, 13 SATC 381, 1945 CPD 377 14. Commissioner for Inland Revenue v Allied Building Society 25 SATC 343 1963 (4) SA 1 (A) 15. Commissioner for Inland Revenue v George Forest Timber Co., A.D. 516 at 526 16. Commissioner of Taxes v Ntchanga Consolidated Copper Mines (1964) 1 All ER 208 (PC) at 212B 17.Concentra (Pty) Ltd v CIR (1942) CPD 18. Cooper and Emroy: 1995 19. COT v BSA Co Investment Ltd 1966 (!) SA 530 (SRAD) 20. Edgars Stores Ltd v Commissioner of Inland Revenue 50 SATC 81,1988 21.Expanatory memorandum on Income Tax Bill, 1992 22. Income Tax Case No 1 (1 SATC 48) 23. Income Tax Case Nol9 (1 SATC 130) 110 24. Income Tax Case No 73 (3 SATC 64) 25. Income Tax Case No 130 (4 SATC 130) 26. Income Tax Case No 832, 1956 27. Income Tax On Appeal No 25, 1962 - (Not yet reported) 28. Income Tax Reporter 1973 29.I.R.C. v Mallaby Deeley (1938, A.E.R. 818 at page 823) 30.nCNo73(SATC64) 31.ITC 103 (1927) 3 SATC 208 32.ITC 169 (1930) 5 SATC 162 33. ITC No 318 (8 SATC 174) 34.ITC 368 (1936) 35.ITCNO490, 1941 36. ITC 512 (1941) 12 SATC 246 37. ITC 542 (1942) 13 SATC 116 38. ITC 615 (1946) 14 SATC 399 39.rTCNo607 1945 40. ITC 674 (1949) 16 SATC 235 41. ITC 703, 1950, 17 SATC 208 42. ITC 770 (193) 19 SATC 16 43.ITCN0 832, 1956 44. ITC 957 (1960) 24 SATC 637 45.ITCNO1017, 1963 46. ITC 1026, 1963, 26 SATC 26 47. ITC 1218 (1974) 36 SATC 212 48.ITCN0 1385, 1984 49.ITC NO 1600 (1995) 58 SATC 131 50.ITC NO 31096, 1 SATC 3 51. Joffe & Co (Pty) Ltd v CIR 1946 AD 157, 13 SATC 354 52. L v Commissioner of Taxes (1992) 54 SATC 91 (ZHC) 53. Local Investment Co v Commissioner of Taxes (SR) 1958 (3) SA 34 111 54.KBI v Van Der Walt 1986 (4) SA 303 (T) 55. Keith Huxham and Philip Haupt: Notes On South African Income Tax. 2003. 22nd Edition. H & H Publications. Roggebaai. 56.Mallalieu v Drummond (1983) 2 All ER 1095 (HL) 57.Nasionale Pers v KBI1986 (3) SA 549 (A), 48 SATC 55 58. Natal Laeveld Boerdery Bk v Kommissaris van Binnelandse Inkomste, 60 SATC 81 59. New State Areas Ltd v CIR 1946 AD 610; 14 SATC 155 60. Plate Glass and Shutterprofe Industries Finance Co (Pty) Ltd v SIR 1979 (3) SA 1124 (T) 41 SATC 103 61. Port Elizabeth Electric Tramways Co Ltd v CIR (1936 CPD) 62. Provider v COT 1950 SR 161, 17 SATC 40 63. Practice Note No 31 of 3rd, 1994 64. Rand Selections Corporation Ltd, 1956 (3) SA 124 (AD) 65. Rand Mines (Mining & Services) Ltd v Commissioner for Inland Revenue 1996, 59 SATC 85 66. SIR v Guardian Assurance Holdings (SA) Ltd 1976 (4) SA 522 (A), 38 SATC 111 67.Rhodesian Railways v Commissioner of Taxes (1925, AD 496) 68. Sub-Nigel Ltd v CIR 1948 (4) SA 580 (A) 15 SATC 381 69. Rand Selection Corporation Ltd, 1956 (3) SA 124 (AD) 70. De KOKER, ALWYN. Silke On South African Income Tax. 1995. 10th Edition. Butterworth Publishers Ltd. Durban 71.Solaglas Finance Company (Pty) Ltd v CIR 1991 AD, 53 SATC 1 72. Tuck v Commissioner for Inland Revenue. 1988 (3) SA 819, 50 SATC 98 73.Wallambrosa Rubber Co v Farmer, 1910 SC 519 74. Weinberg v CIR, 14 SATC 210 75. W F Johnstone & Co Ltd v CIR 1951 SA 283 (A), 17 SATC 235 112