BU357 Chapter 4: Chapter 4- Income from Business
Document Summary
Income: income after deduction of expenses currently incurred to produce it. Determination of profit is question of law. Profit of a business for a tax year is to be determined by setting against the revenues from the business for that year the expenses incurred in earning that income. In seeking to determine profit, the goal is to obtain an accurate picture of the t/p"s profit for the given year. In calculating profit, t/p is free to use any method which isn"t inconsistent with: the provisions of the ita, established case law principles or rules of law", well-accepted business principles. Well-accepted business principles, include but not limited to gaap, are not rules of law but interpretive ads. Reassessment t/p shows that they provided accurate picture of income for the year, consistent with act, case law, and well-accepted business principles, then minister shows if figure represents accurate picture.
