Case History

Alan has represented the Commissioner for Inland Revenue in the tax court in the following matters:


1          Robin Consolidated Industries v CIR 1997 (3) SA 654 (SCA)


Whether the taxpayer, who had been liquidated, had continued trading after that date and was allowed to employ an assessed loss. The court found that the particular transactions did not amount to trading, but were instead part of the liquidation process. Consequently, the taxpayer was not allowed to carry over its assessed loss from the previous tax year.


2          Natal Laeveld Boerdery (Edms) Bpk v KBI 1998 (1) SA 639


Whether the interest, which was paid on a loan, which was used to buy out a business partner, constituted an allowable deduction. The taxpayer argued that the reason for buying out the partner was to increase the productivity of its farming operations and generate more income. The court found that the true reason for the loan was to buy out the business partner, and dismissed the appeal.


3        Stander v CIR, 1997 93) SA 617 (C)


Whether the prize of an overseas holiday has a value, which constitutes gross income. The court found that the taxpayer had not received this prize in the context of his employment, and as compensation for his services. Neither did the prize have a value in the hands of the taxpayer, and for these reasons, he was not liable to tax.


4        Erf 3183/1 Ladysmith v CIR, 1996 (3) SA 942 (A)


The successful application of the “substance over form” test to a series of contracts.


5        CIR v Datakor Engineering 1998 (4) SA 1050 (SCA)


Whether the terms of a scheme of arrangement, which was concluded in terms of  section 311 of the Companies Act, resulted in a benefit to the taxpayer, which reduced its assessed loss. The court answered this question in the affirmative and found that the value of the benefit was the amount by which its creditors had been reduced in terms of the scheme of arrangement. 


6        ITC 1624, 59 SATC


Whether the taxpayer could be taxed on amounts which he had received by over invoicing his clients. The court found that the amounts were subject to tax, as the taxpayer had over invoiced his various clients over an extended period, as part of his business.


Alan has also represented taxpayers in the tax court:



7          ITC 1792, SATC 236


In this matter the court was asked to decide whether amounts fraudulently received, were taxable in the hands of the taxpayer.


The taxpayer was part of a syndicate, which had purchased shares and then sold  them to the taxpayer’s client, without disclosing the syndicate’s interest in those shares. The court found that the relationship of principle and agent had existed between the taxpayer and his client, and that consequently, he was prohibited from making any secret profit from this relationship.


The law of agency also prescribed that the taxpayer was obliged to account to his client for any secret profits, and that those profits belonged to his client.Consequently, those profits did not accrue to the taxpayer, and he was not liable to tax on those amounts.

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