Chevalier v The Board of Inland Revenue

• Jurisdiction: Trinidad & Tobago
• Judge: Bernard, C.J.,G. des ILES
• Judgment Date: 27 July 1986
• Neutral Citation: TT 1986 CA 24
• Docket Number: Civil Appeal No. 130 of 1983
• Court: Court of Appeal (Trinidad and Tobago)
• Date: 27 July 1986

Court of Appeal

Bernard, C.J.; G. des Iles, J.A.; Persaud, J.A.

Civil Appeal No. 130 of 1983

Chevalier

and

The Board of Inland Revenue

Appearance

S. Shivrattan for the appellants.

Miss S. Collymore for the respondent.

Income tax - Assessment — Dispute over whether sum of $71,950 was a capital sum received from sale of land and not income — Appeal Board found evidence of the appellants unsatisfactory and unconvincing and so concluded after it had seen and heard the witnesses — Appeal dismissed.

Bernard, C.J.

1 At the conclusion of the arguments in these appeals we dismissed them with costs: We indicated of the time that we would give our reasons later. We do so now.

2 The appeals are by way of Case Stated under 5.43 G of the Income Tax Ordinance Ch.33 No. 1 (now s.9 of the Tax Appeal Board Act, Ch. 4:50).

3 The appellant, Nagib Moses - formerly Nagib Elias Moses El Habre (“Nagib”) is the (brother of the other appellant Adella Chevalier formerly Pagibe Elias Moses El Habre (“Adella”). In the year 1974 they both carried on a dry goods store in partnership under the name Elias Poses 8 Company in which each had a fifty per cent (50%) share, For the year 194 they were individually assessed to tax by the Board of Inland Revenue (“the Board() in the sum of $32,082.50 as to Nagib, and $28,231, 60 as to Adella. They were each also assessed to unemployment levy for the same year by the hoard in the sum of $2,376.80 as to Nagib, and $2.,376.80 as to Adella. They each disputed the Board's assessments by notices of objection under s.43D of the Ordinance (now 5486 (2) of the Income Tax Act, Ch, 75:01). Under and by virtue of this provision each sought a review and revision of the respective assessments by the Tax Appeal Board (“the Appeal Board”). The two appeals were consolidated by Order of the Appeal Board dated February 10 ^th 1982, under and by virtue of the powers given to it by Rule 11 of the Tax Appeal Board Rules Ch. 4:50.

4 When the matter came up for hearing before the Appeal Board on May 20 ^th, 1982, counsel for both appellants, Mr. Shivrattan, invited the attention of the Appeal Board to a written agreement between the parties which had been filed that same day. We shall come to it in a moment; but even so we propose to highlight only those features of it that are necessary for the purposes of the appeal before us. Thereafter, counsel then stated to the Appeal Board that, in the light of that agreement, the only issue for determination for the latter was whether certain deposits amounting to the sum of $71,950.00 in the business account of the appellants at the Canadian Imperial Bank of Commerce in this country were capital sums received on the sale of a parcel of land in Lebanon.

5 The agreement between the parties was on the following footing:

“It is agreed that depending on the determination of the Appeal Board as to the treatment of the sum of $71,950,00 claimed to hive been received by the appellant, Nagib, from his son-in-law Labib Habre and deposited into Nagib and Adella's accounts the chargeable income of the respective parties and the tax and unemployment levy payable for the particular year of income under review to be as follows:

• (1) If the sum of 371, 950.44 is determined to be not part of Nagib and Adella's income then as to Nagib his agreed adjusted chargeable income would he the sum of $27,44.40 and accordingly the amounts payable by him would be $10,310.00 and $870.40 for income tax and unemployment levy respectively. And insofar as Adella was concerned her agreed adjusted chargeable income would be the sum of $21, 563.44 and accordingly the amounts payable by her would be $7,390.50 and $5780.00 for income tax and unemployment levy respectively.

• (2) If, however, the sum of $71,950.00 is determined to be part of Nagib and Adella's income then as to Nagib his agreed adjusted chargeable income would be $63,375.44 and accordingly the amounts payable by him would be $32,082.50 and $2,668.75 for income tax and unemployment levy respectively. And insofar as Adella was concerned her agreed adjusted chargeable income would be $57,536.00 and accordingly the amounts payable by her would be $28, 231.60 and $2,376.80 for income tax and unemployment levy respectively.”

6 The matter was accordingly contested on this footing before the Appeal Board which following all the oral and documentary evidence at the end of the day in its judgment delivered can July 27 ^th, 1982, found in favour of the Board. Against this decision Nagib and Adella have appealed. The ground of appeal is that the Appeal hoard erred in law in holding that the appellants failed to prove that the sum of $71,950,00 was a capital sum received from the sale of land having regard to all the evidence tendered. And in furtherance of this aspect of the appeals the Appeal Board in its Case stated has submitted to this Court for its determination the question whether having regard to all the evidence it gas wrong in law in holding that the appellants - Nagib and Adella - had failed to prove that the sum of $71,950.00 was capital. However, before going into the contentions which have been agitated before us, this we consider, is do appropriate point to record as briefly as we can the evidence that was proffered to the Appeal Board that caused it to come to the decision which it did and which has been impugned here by Nagib and Adella.

7 Before the Appeal Poard evidence was called through Aziz Joseph Hadeed (“Hadeed”), Labib Habre (“Labib”) and Nagib on behalf of Adella and himself. Adella herself did not testify. No evidence was called on behalf of the respondent.

8 It was not disputed that Hadeed was at the time the Syrian Consul for Trinidad and the Caribbean; that he was in fact educated in the Arabic language; and that this was the language in which documents were written in Syria attd the Republic of Lebanon. Six documents were tendered in evidence through him and numbered A.J.H. 1 to 6. Two of these A.J.H. 5 and b - were tendered in evidence through him by the respondent and had in fact been certified by Hadeed, as the correct English translations of A.J.H. 1 and 3 respectively. So too were A.J.H. 2 4 and 4. These latter had been certified by his Vice-Counsel, one Albert Hadeed, subsequent to Hadeed's certification. The Appeal Board accepted that A.J.H. 2 and 4 were English translations of A.J.H. and 3 which were in the Arabic language.

9 Hadeed's evidence was purely formal. According to him A.J.H. 1 and 3 had in the course of time been obtained from the Ministry of Land in the district of Babda in Lebanon. The former represented that on July 16 ^th, 1975, Nagib and Adella each owned 1,200 shares in 2,151 square metres of land. No. 979 at Btalloun in Lebanon. And the latter indicated that this land had been inherited on April 9 ^th, 1975, and had been sold to one fngela Nnaggib Moses - the wife of Labib on August 4 ^th, 1975. We shall hereafter refer to the parcel, of land as “the Lebanon parcel”.

10 It suffices to state at this point that it would appear from the judgment and the Case Stated that Angela Nagib Moses is the daughter of Nagib and Labib is his son-in-law. Apparently at some time the two were united in wedlock.

11 Nagib claimed that returns from sales in their store were deposited to the business account of himself and Adella at the Canadian Imperial Bank of Commerce. In addition, he himself had deposited to the said account monies held on trust for people generally. In 1974 he had deposited to the same account a total sum of $71,950.00. This sum was by way of a number of deposits to the account and they represented sums paid to himself and Adella from time to time by Labib or on his behalf for the Lebanon parcel which he and Adella had expected to inherit on the death of their father, Elias Moses, who was then ill and residing in Lebanon. He and Adella had inherited the Lebanon parcel some time after the death of their father which occurred on November 4 ^th, 1976. Labib was about to return to Lebanon to establish a business there and he had expressed an interest in acquiring the Lebanon parcel. Hence the reason for the transaction. We pause flare to recall that the evidence emanating from A.J.H. 3 was to the effect that on August 6 ^th, 1974, the Lebanon parcel had been sold only to his daughter, Angela Nagib Moses - the wife of Labib. His explanation for this seeming inconsistency elicited a number of reactions in his examination in chief. He claimed that there could have been complications. Then he went on to claim that Labib wanted it that way. Next it would appear from the judgment that he ended up day asserting that it was never discussed in whose name the Lebanon parcel should be transferred. But that was not all for in cross-examination he accepted that the affect of his evidence with regard to the transaction clearly showed that he had purported to enter into the deal before he and Adella had inherited the Lebanon parcel. Further, the purported complications with which he was concerned meant that Labib had had the power of attorney in respect of the Lebanon parcel and could have sold it. In passing we merely wish to observe that he denied the suggestion that his daughter received the Lebanon parcel as a gift as a result, no doubt, of her betrothal to Labib.

12 The evidence of Nagib with regard to the various deposits made tea his and Adella's account at the Canadian Imperial Bank to cover the transaction is detailed hereunder:

Date of deposit receipt $	Amount	Exhibit-Duplicate Deposit	deposit receipt
26.6.74	40.000	Cash	N.M. 4
27.8.74	5,300	Cheque from Issa Nicholas	N.M. 1
2.9.74	10,000	Canadian Bank of Commerce draft	N.M. 5
6.9.74	10,000	Barclays Bank Draft	N.M. 5
6,650	Canadian Bank of Commerce draft	N.M. 3”

13 With regard to the sum of $40.000.00 which had been deposited...