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TAX2601 Assignment 3 (COMPLETE ANSWERS) Semester 2 2024 - DUE 2 September 2024
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TAX2601 Assignment 3(COMPLETE ANSWERS)
Semester 2 2024 - DUE 2
September 2024
CONTACT: biwottcornelius@gmail.com
, TAX2601 Assignment 3 (COMPLETE ANSWERS)
Semester 2 2024 - DUE 2 September 2024
QUESTION 1 (12 marks) Easy Elevators (Pty) Ltd’s (“EE”)
core business is the maintenance of elevators in
residential and commercial buildings in the Gauteng
region. It has service agreements with each of its
customers and in terms of these, a monthly maintenance
fee of R15 000 is payable on or before the seventh (7th)
day of each month before that month’s service occurs. EE
is a company incorporated in South Africa and its year of
assessment ends on 31 March. One of EE’s customers
paid an amount of R45 000 into EE’s bank account on 7
March 2024. This amount is for the maintenance service
fees in respect of the following three months i.e. March
2024 to May 2024. EE was informed by the customer that
the building’s caretaker decided to pay three months’ fee
upfront as he would be out of the country for an extended
period and wanted to ensure the maintenance of the
elevators would continue as usual during this time.
REQUIRED MARKS Discuss whether the receipt of the R45
000 maintenance service fee would constitute gross
income of Easy Elevators (Pty) Ltd as defined in the
Income Tax Act 58 of 1962 for the year of assessment
ending 31 March 2024. List all the gross income definition
requirements, discuss each one and briefly refer to case
law to strengthen your argument. 12 4
TAX2601/2024/Semester 2/Assessment 3
To determine whether the receipt of the R45,000 maintenance service fee constitutes gross
income for Easy Elevators (Pty) Ltd ("EE") for the year of assessment ending 31 March 2024,
we need to evaluate this in the context of the definition of "gross income" as provided in the
Income Tax Act 58 of 1962 ("the Act") and relevant case law.
Definition of Gross Income (Section 1 of the Income Tax Act 58 of 1962)
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