Question 6
ICAN
•
2022
•
TAXATION
•
mixed
Case Stimulus
The difficulty in determining what constitutes a trade has led to many litigations and the huge number of tax cases that exist on the issue. The problem from the decided cases is that of finding an absolute test for identifying a trade.
The conclusion had always been that there are no fixed rules but that each case could be examined on its own facts.
Requirements
(
a
)
State FOUR considerations that influence the identification of badges of trade.
(
b
)
Ndakogi Nigeria Limited commenced business in 2007. The extract of the statement of profit or loss of the company for the year ended December 31, 2021, has revealed the following:
N’000 N’000
Gross turnover from core business activities 26,000
Revenue from closed operations 4,000
Expenses on closed operations (2,600)
Profit on closed operations 1,400 1,400
Dividend received (gross) 1,800
Rent received (gross) 850
Revenue from other operating activities 8,000
Expenses on other operating activities 2,600
Profit from other operating activities 5,400 5,400.
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About This Question
This is
Ican
2022
Taxation
Question 6.
It is one of the
mixed
questions from the
2022
Ican
Taxation
examination.