Tag: Crookes Brothers Ltd

South Africa vs Crookes Brothers LTD, May 2018, High Court, Case no 14179/2017

South Africa vs Crookes Brothers LTD, May 2018, High Court, Case no 14179/2017

Agricultural group Crookes Brothers Ltd issued loans to its Mozambican subsidiary and in accordance with the terms of the loan, the group made transfer pricing adjustments to its taxable income. Later on, Crookes Brothers Ltd requested the tax administration to issue a reduced assessments, claiming that the adjustments were made in error. They argued, that the terms of the loan were aligned with the requirements of section 31(7) of the Income Tax Act No. 58 of 1962 (the Act), which would exempt the loan from application of transfer pricing rules. To support the claim, Crookes Brothers Ltd provided the tax administration with the loan agreements. The tax administrations  concluded that the terms of the loan agreements were not aligned with the requirements of section 31(7) of the Income Tax Act No. 58 of 1962 (the Act). The loan agreement had a clause that accelerated the debt in the event of bankruptcy, liquidation, business rescue or judgment against MML. This clause was the ... Continue to full case