In Pickford v Quirke, it was held that the four transactions of buying and selling cotton mills take together fell within the term ‘trade’, though each by itself did not.
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2 8. Interests in the similar field. Interests in a similar field would indicate similar profit seeking motive. 9. The Method of Financing When one borrows money, it could be an indication of a quick sale for a profit and not acquisition of an investment. In DEF. v CIT, a taxpayer borrowed money to buy an estate which was then sold off within a period of less than three weeks. It was held that the transaction was not ‘trade’, but was an adventure in the nature of trade. (c) Tax significance of the date of commencement (DC) of business: 1. A new company which commences business in the year, the first set of account from DC to any date (end of any month) in the same year (2014) [s21A(4)(a)], or the following year (2015)[s21A(4)(b)] or in the third year (2016) [s21A(4)(c)]can be accepted as the basis period. [Note: With effect for YA2014] 2. Pre-commencement expenses that are incurred before DC are not allowable in arriving at the adjusted income from business. There expenses are not wholly and exclusively incurred in the production of business income. T. 6; A. 2The gain arisen from the sale of the jade antique by Ben is (likely) chargeable to income tax on the following reasons : i.The jade antique was sold with a substantial profit of RM60,000 within a very short period (a few days). ii.The jade antique is of similar nature as goods (subjects of trading) that can be bought and sold in business transactions. iii.Ben had paid RM40,000 for the jade antique using credit card and did not have money to purchase it. He paid the credit card bill by using a part of the sale proceed of the jade antique. This could be an indication of an intended quick sale for a profit and not an acquisition of a gift (for his grandfather). iv.A single transaction can constitute an adventure or concern in the nature of trade which is within the meaning of ‘business’ under section 2 of the ITA, 1967.(Note: It would be acceptable to argue that the gain is not chargeable to tax)