Civil Appeal 6867/22 Eli Kahane Holdings Ltd. v. Tax Assessor Tel Aviv 3 - part 41

Misdeeds

60. As stated above, the appellants argued that the court erred in its determination that the respondent's alternative argument that the receipt should be classified as occupational income in accordance with section 2(1) of the Income Tax Ordinance. Considering my determination that the receipt received by Kahane in respect of the non-compete agreement should be classified as fruitful income, I am not required to discuss this argument.
61. Another argument made by the appellants is that the court erred in determining that a capital loss should not be deducted from Kahane's income in respect of a loan he gave to his nephew. This argument should be rejected.  As the District Court noted, it is not possible to deduct a capital loss from Kahane's income (in view of their classification above), and in any event, the appellants have not been able to point to a reason that justifies intervening in the District Court's factual determination that it has not been proven that this is a debt that the chances of collecting have failed.
62. I will also note that in my view, there is no reason to intervene in the amount of expenses awarded by the trial court. In the ruling of this Court, it was emphasized that it is not the way of the appellate court to intervene in the court expenses awarded by the trial court, except in rare and extreme cases in which a legal error occurred or when there was a material defect in the judgment of the trial court (see, for example: Civil Appeal 47643-05-26 Hod Habira Projects Ltd.    Levy, paragraph 7 and references there (July 9,2026)).  In the present case, in my view, the appellants were not able to point out a material defect in the legal expenses that the trial court ruled.  Indeed, the tax appeals filed by the appellants were heard together and were not conducted as three separate proceedings.  However, I am of the opinion that taking into account the nature of the proceeding, its complexity, the manner in which the proceeding was conducted and the amount in dispute between the parties (in accordance with the provision of Regulation 153(c) of the Civil Procedure Regulations), there was no defect in the total amount awarded to the appellants - ILS 25,000 each, for a total of ILS 75,000.

Conclusion

63. In view of the aforesaid, I will suggest to my colleagues that we dismiss the appeal in this case. In the circumstances of the case, and in view of the aforesaid in paragraph 27, I will suggest to my colleagues that the appellants bear the respondent's expenses, in the sum of ILS 25,000 each, and a total of ILS 75,000, in this court as well.