In calculating a taxpayer’s taxable income under the Income Tax Act 58 of 1962
(“the act”), a deduction of his “expenditure … actually incurred” is allowed against
the taxpayer’s income. The meaning of the word “expenditure” has in the past
enjoyed relative little attention in our courts. However, this changed with C:SARS v
Labat Africa Limited, in which the supreme court of appeal ruled that the issuing
of shares by a company as consideration for the acquisition of assets does not
constitute “expenditure” for purposes of the act.