BACHELOR OF COMMERCE YEAR 3-ACADEMIC AND ASSESSMENT CALENDAR - DISTANCE 10.1.3 TAXATION 302 QUESTION ONE Refer to the six (6) situations below and answer the questions that follow: [100] [20] Roya Salon Roya Salon, the local hairdresser, paid damages to two of his customers. Both are suffering as a result of his faulty equipment. Maude was burnt by a hairdryer, while Mary suffered an electric shock Workman Attorneys (3) Workman Attorneys a firm of attorneys, paid compensation to a client for the maladministration of a family trust account. Hyper Store (3) Hyper Store remained open on a public holiday. It was subsequently fined for trading. Mike Singh, its proprietor, was also fined for contravening price control regulations. (4) Volane Dry Cleaners CC Compensation was paid to one of his customers by Volane CC, the owner of a dry-cleaning business, for the loss of two suits that had been entrusted to his care by this customer. (2) Stone Construction Limited Ten years ago Stone Construction Limited erected a block of flats for a client in accordance with the client's specifications. The block was completed and handed over to the client. The contract consideration was settled in full. During Stone Construction Limited's 2018 year of assessment the external walls of the block revealed dampness. It was then discovered that the walls had not been built according to specifications. Its client instituted an action against it for damages. It then settled the damages. (4) Bold Gas Supplies Bold Gas Supplies is involved in the retailing of gas and petrol lamps. They recently sold a lamp to Chester under a guarantee. This particular lamp exploded causing injuries to Chester. He then paid. damages to Chester. (4) 25 REGENT BUSINESS SCHOOL (RBS) JANUARY 2022 - BACHELOR OF COMMERCE YEAR 3 - ACADEMIC AND ASSESSMENT CALENDAR - DISTANCE Required: In each of the above situations, determine, giving full reasons, whether the expenditure would be deductible from the respective taxpayer's income