Commissioner of Taxes v Messina (Transvaal) Development Co Ltd [1915] ZATPD 92 (22 November 1915)

Income Tax.-Foreign company.-Loss outside the Union.-Deduction.-Taxable income.-Act 28 of 1914, sec. 14 (1).

In terms of sec. 14 (1) of Act 18 of 1914, a taxpayer is entitled to deduct from the gross amount of his income " losses, outgoings, including interest and
expenses actually incurred in the Union" in producing his taxable income. In the return of taxable income of an English company carrying on business
in the Transvaal, the public officer of the C'Ompany deducted a certain amount being proportion of loss in rnspect of money lent abroad and of money
deposited abroad with bankers, who had failed. Held, that as the loss was incurred outside the Union it could not be deducted. Held, further, (per WESSELS, J.), that the loss was prima facie a los_s of capital and not of income, and could not, therefore, be deducted.