Section 1160: Calculation of income
3301.This section provides additional information on conditions C and D. It is based on section 842(1AB), (1AC), (2D), (2E) and (3A) of ICTA.
3302.Some references to income in section 842 of ICTA, for example references to income derived from shares or securities, are in a context which implies that the term “income” is to be interpreted in the framework of tax language and principles. References to income in the context of the retention of income in section 842(2A) and (2B), on the other hand, do not appear to invoke the tax-based meaning of income.
3303.Section 842(1AB) of ICTA, on which subsection (2) is based, makes provision for determining amounts of “income” for the purposes of subsections (1)(a) and (e) of that section (and accordingly of subsection (2A)(b)). The requirements in section 842(1)(a) and (e) are conditions C and D in section 1159.
3304.In contrast section 842(2D) and (3A) of ICTA are expressed to apply to section 842 as a whole. But it appears that those subsections also presuppose a tax-based measure of income and that their application is accordingly limited to the purposes for which section 842(1AB) applies.
3305.Therefore subsection (1) provides that subsections (3) and (4)of this section, based on section 842(2D) and (2E) and section 842(3A) respectively, as well as subsection (2), apply in determining what is to be included as the amount of the company’s income or the amount of income which a company derives from shares or securities for the purposes of conditions C and D (and accordingly of section 1161(2)(a)).
3306.Subsection (5) is concerned specifically with what is to be included as income of the company for the purpose of condition C.