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GENERAL DEDUCTION FORMULA
Not Of A Capital Nature
The fact revealed that millions of Rands were spend in
acquiring a contract to manage a mine. This expenditure
was held to be capital in nature because it was a cost
expended to acquire that income-earning right/structure.
(Rand Mines v CIR)
It was held that the expenditure in issue neither created
nor preserved any capital asset in hands of the taxpayer
and whilst not in itself conclusive it was indeed a
consideration of considerable importance as where no
new asset for the lasting benefit of the taxpayer has been
created, any questioned expenditure naturally tends to
assume more of a revenue character.
(BPSA v CSARS, 2007)
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