16 April 2025 – Income Tax Act, 1962, and Tax Administration Act, 2011
Taxation – taxpayer deriving income from mining operations – whether expenditure incurred in respect of the relocation of a neighbouring residential township, expenditure incurred in respect of the relocation of certain infrastructure within the mining area, legal costs incurred with regard to the relocation of the township, and the costs of relocating a 66kV line supplying electricity to mine equipment to a new location within the mining area, deductible – special deductions provisions in s 15(a) read with s 36(7C) of the Income Tax Act 58 of 1962 (the ITA) in respect of ‘capital expenditure’ – meaning of ‘in terms of a mining right’ and ‘other than in respect of infrastructure’ in s 36(11)(e) of the ITA – meaning of ‘mine equipment’ in s 36(11)(a) of the ITA – whether deduction for wear and tear under s 11(e) of the ITA established in respect of 66kV line – in the alternative, whether general deduction provision in s 11(a) of the ITA applies to expenditure in respect of relocation of the 66kV line – burden of proof in s 102 of Tax Administration Act 28 of 2011 (TAA) – whether legal expenditure deductible in terms of s 11(c) of the ITA – whether interest in terms of s 89quat(2) of the ITA on outstanding tax on disallowed deductions a result of circumstances beyond the control of the taxpayer – whether the Commissioner for the South African Revenue Services (CSARS) should have determined, in terms of s 89quat(3) of the ITA, that interest not be paid, whether in whole or in part.
