See also the Supreme Court's judgment in Other Municipal Applications 75/79, Real Estate Appreciation Tax Administration v. Avivit in a Tax Appeal (December 13, 1979), where the well-known rule was established from time immemorial according to which:
"When the court is required to deal with the question of the liability of the transaction with tax, the terms used by the parties to the agreement and the clothing in which they dressed the agreement constitute prima facie evidence of the nature of its content, and nothing more; and if the content of the agreement shows that the transaction is different in its actual essence from the title or clothing given to it in the agreement, the court will not suspend that title or dress, and will discuss the matter according to the true nature of the transaction as it is reflected in the essence of the agreement according to its true content."
Another ruling, which dealt with the manner in which the nature of a transaction for the purposes of tax law is determined, is found in the judgment of the Honorable President A. Barak Other Municipality Applications 6722/99, Tel-Aviv Value Added Tax Administration v. Mishkenot Clal Mediterranean Towers Ltd., IsrSC 58(3) 341, at paragraph 9:
"The essence of a transaction is determined for the purposes of tax law according to the true economic nature of the transaction. The name of the transaction, or its designation by the parties, does not determine the nature of the transaction for the purposes of tax law. This principle has been accepted for years in tax law (see: Additional Hearing 16/82 The Tax Assessor, Tel Aviv v. Lidor [5], Civil Appeals Authority 3527/96 Axelbard v. Property Tax Administration – Hadera Area [6], at p. 403; Civil Appeal 5472/98 Real Estate Appreciation Tax Administration v. Hadari HaCoastal Company No. 63 in Tax Appeal [7]). It is based on considerations of preventing illegitimate tax planning, achieving justice and equality in tax law, and promoting the neutrality of the tax system."