Page 226 - SAIT Compendium 2016 Volume2

IN 11 (3) Income Tax acT: InTeRPReTaTIon noTes IN 11 (3) Section 8 (4) (a) – Paragraph (i) of the proviso
Section 22 (1) – Closing stock
Section 22 (8) (b) (ii) – Disposal at less than market value
(4) (a) There shall be included in the taxpayer’s income all amounts allowed to be deducted or set off under the provisions of sections 11 to 20, inclusive, section 24D, section 24F, section 24G, section 24I, section 24J, section 27 (2) (b) and section 37B (2) of this Act, except section 11 (k), (p) and (q), section 12 (2) or section 12 (2) as applied by section 12 (3), section 12A (3), section 13 (5), or section 13 (5) as applied by section 13 (8), or section 13bis (7), section 15 (a) or section 15A, or under the corresponding provisions of any previous Income Tax Act, whether in the current or any previous year of assessment which have been recovered or recouped during the current year of assessment: Provided that the provisions of this paragraph shall not apply in respect of any such amount so recovered or recouped which has been—
(i) included in the gross income of such taxpayer in terms of paragraph (jA) of the de nition of ‘gross income’; .. .
22 Amounts to be taken into account in respect of values of trading stocks
(1) The amount which shall, in the determination of the taxable income derived by any person during any year of assessment from carrying on any trade (other than farming), be taken into account in respect of the value of any trading stock held and not disposed of by him at the end of such year of assessment, shall be—
(a) in the case of trading stock other than trading stock contemplated in paragraph (b), the cost price to such person
of such trading stock, less such amount as the Commissioner may think just and reasonable as representing the amount by which the value of such trading stock, not being any nancial instrument, has been diminished by reason of damage, deterioration, change of fashion, decrease in the market value or for any other reason satisfactory to the Commissioner; and
(8) If during any year of assessment—
(a) any taxpayer has applied trading stock to his private or domestic use or consumption; or (b) any—
(i) taxpayer has applied trading stock for the purpose of making any donation thereof;
(ii) taxpayer has disposed of trading stock, other than in the ordinary course of his trade, for a consideration less
than the market value thereof;
(iii) trading stock of any company has on or after 21 June 1993 been distributed in specie to any holder of shares in that company;
(iv) taxpayer has applied any trading stock for any other purpose other than the disposal thereof in the ordinary course of his trade and under circumstances other than those contemplated in paragraph (a) or subparagraph (i), (ii) or (iii) of this paragraph; or
(v) assets which were held as trading stock by any taxpayer cease to be held as trading stock by such taxpayer,
Section 22 (8) – paragraph (d) of the proviso
and such amount shall be included in the income of the taxpayer for the year of assessment during which such trading stock was so applied, disposed of, distributed or ceased to be held as trading stock: Provided that where—
.. .
(d) such trading stock consists of assets in respect of which any amount received or accrued from the disposal thereof
is or will be included in the gross income of the taxpayer in terms of paragraph (jA) of the de nition of ‘gross income’, the provisions of paragraph (b) (iv) shall not apply.
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