Tomy is a key customer of Rubber (Pty) Ltd (hereafter Rubber), a well-established South African shoe sole provider. The two companies share the same year-end. When Tomy experienced the sudden increase in sales, Rubber extended an interest-free loan of R2 050 000 on 1 February 2020 in order to enable Tomy to cater for the increase in supply. Tomy used the loan immediately as follows: Purchase of land R350 000 Construction of factory building on land purchased (completed 1 July 2020 and brought into use immediately after completion) R1 200 000 Purchase of Machine B (new) R800 000 (brought into use on 1 July 2020) Deductible expenditure R200 000 Purchase of Trading Stock R500 000 ( R50 000 still on hand on 31 December 2020) Tomy was able to justify the loan and repayments of the loan as the company signed a contract with a local customer on 15 December 2019 and delivered R1 200 000 of takkies on 1 February 2020. The local customer informed Tomy during August 2020 that they were liquidated and that Tomy will not receive any further payment from them. Tomy has written off the outstanding debt as bad debts at the end of the financial year. In an attempt to raise cash reserves, Tomy issued 100 000 ordinary shares on 18 August 2020, of which Rubber purchased 88 000 shares. Rubber did not own any of Tomys shares before this date. Tomy now has 120 000 ordinary shares in issue. Tomy approached Rubber as Tomy was not able to repay the amount due on the outstanding loan. The total amount was still due. Rubber acknowledged that Tomys financial situation was due to unforeseen circumstances and agreed to write off 80% of each of the balances owing by Tomy, except for the land that Rubber agreed to write off the full amount owing on 30 December 2020. REQUIRED Calculate and motivate the income tax consequences of the above transactions and events for Tomy for the year of assessment ended on 31 December 2020