Kalliecharan v The Board of Inland Revenue
| Jurisdiction | Trinidad & Tobago |
| Judge | Barnes, S.C. |
| Judgment Date | 01 January 1994 |
| Date | 01 January 1994 |
| Court | Tax Appeal Board (Trinidad and Tobago) |
| Docket Number | No. I 75 of 1989 |
Tax Appeal Board
Barnes, S.C.; Burke, Mem.; Dean-Maharaj, Mem.
No. I 75 of 1989
Mr. Balroop Roopnarine for appellant.
Ms. Gillian Wolffe for respondent.
Revenue law - Income tax — Respondent treated the sum of $86,625.00 as unreported income of the appellant for income year 1980 — Appellant objected — Whether the appellant had satisfied the onus on him to establish that he did not in 1980 earn the sum of $86,625.00 treated by the respondent as unreported income — Decision that on a balance of probabilities the sum of $86,625.00 did not come from the earnings of the appellant in 1980 — Appeal allowed.
This is an appeal against assessments to income tax and unemployment levy for the year of income 1980 during which the appellant was a partner in a business which operated at 11 Mucurapo Street, San Fernando, under the name of Kalliecharan Brothers, of which his father Dhanpaul Kalliecharan was the senior partner.
The appellant had submitted an income tax return for the year of income 1980 showing his chargeable income as $4,736, and this had been accepted by the respondent. However, following a tax audit for the years 1979 to 1983 adjustments were made to the assessments for 1980 resulting in the issue of Notices of Assessments dated 30th December, 1986 under which additional tax and levy were called for in amounts of $46, 725.30 and $3,693.05 respectively.
The reason for the adjustment is set out in para. 4 of the respondent's statement of case of 21st July, 1992 (on record) of under:–
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“4. The said audit examination revealed that –
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(i) the appellant purchased property Lot Number 180 Gulf Drive, Gulf View, La Romain at a price of $96,250 during income year 1980. The Respondent i discovered that ten percent of the said purchase price was charged to the appellant's account in the books of the partnership and requested the appellant to provide information as to the source of funds to finance the balance of the purchase price. The appellant failed to provide information as requested. Accordingly, the respondent treated the sum of $86,625 as unreported income of the appellant for income year1980;
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(ii) the appellant claimed a sum of $2,500 as owner/occupied property expenses. The respondent disallowed this claim as the appellant failed to provide documentary evidence in support of the said claim as required by the Income Tax Act.
The appellant had objected to both of the above, and had provided such evidence that his objection to the disallowed claim of $2,500 for expenses on the owner occupied property was allowed.
The issue is principally one of fact and we are to determine on the evidence whether the appellant has satisfied the onus on him to establish that he did not in 1980 earn the sum of $86,625 treated by the respondent as unreported income. That amount was found to be a balance paid on purchase of a property at Lot No.180, Gulf Drive, Gulf View, La Romain, San Fernando for a total of $96,250.
Evidence for the appellant was given by four (4) witnesses, and by the appellant himself; and hereunder we record such testimony as we consider relevant.
Shair Shah Ali, who described himself as a Real Estate agent for over twenty (20) years testified that in the year 1980, he was employed with the firm of Terry Wyatt's Real Estate Agency. In that position he had dealt with an enquiry from Dhanpaul Kalliecharan, father of the appellant, regarding the purchase of a piece of land at Gulf View Development which had been offered for sale by the Agency.
He had taken Dhanpaul Kalliecharan to view the property and the day after the viewing had received a down payment from him. Though after receipt of the down payment, he had had no further dealings with the matter, he testified that he knew that the purchase transaction had been finalised by the Agency.
He further testified that he had had no dealing with Harold Kalliecharan, the appellant, and that Dhanpaul Kalliecharan had stated to him that he was buying the land for his son, Harold.
The appellant testified that in 1980 he was a partner in a business Kalliecharan Brothers, which he had joined in 1971 or 1972 and prior to that he had been living in Canada. His father who had been involved in the business for twenty-five (25) years, had been the senior partner. The partnership had been audited by the Board of Inland Revenue for income years 1979 to 1983, and he had similarly been subjected to a tax audit for the same period.
In 1980 he owned a parcel of land at Gulf View, La Romain, together with his wife, Vedya, for which the purchase consideration, as stated in the Deed of Purchase (Exhibit H.K.1) had been $96,250.00 and this sum had been provided by his father Dhanpaul. He had signed the purchase deed as requested by his father, but had not visited the land prior to so doing, nor did he have any dealings or negotiations with the vendor as such matters had been dealt with by his father.
At the tax audit stage regarding the year 1980, he as well as the partnership had been represented by one Alan Rambutan, a Chartered Accountant, who at the same time was the accountant for Kalliecharan Brothers.
In 1992, he had telephoned the Bank of Nova Scotia, San Fernando and requested information from them regarding a bank draft and as a result of that telephone conversation, the information was communicated to his father c/o of himself in a letter from the bank dated 1st October, 1992, (Exhibit H.K.2) As follows:–
“Mr. D. Kalliecharan,
c/o Harold Kalliecharan,
Mucurapo Street
SAN FERNANDO.
Dear Mr. Kalliecharan,
At your request we advise the following Draft No.646898 dated June 28, 1980, for the amount of Fifty Thousand Dollars ($50,000.00) was purchased by you and also issued in your favour.”
Exhibit H.K. 2 was provided by the bank after he had requested a copy of a Bank Draft, and had provided the bank with a copy of the relevant cheque stub. The transaction was about twelve (12) years old at the time and the bank could not supply a copy of the Draft.
The appellant regarded Exhibit H.K. 2 as evidence that the bank draft had been in the name of his father, Dhanpaul Kalliecharan, to whom it had been given, it being part of the funds utilized to purchase the property. He, the appellant, had not himself provided any money for the purchase of the property.
When asked about a letter dated 30th October, 1987 from Alan Rambutan & Co to the Board of Inland Revenue, (folio 17 of the record) he said that even though the subject matter of the letter was “Harold Kalliecharan - File No. 314388-3 Income Year 1980” which referred to the purchase consideration for the property at Gulf View, the information concerned his father's savings account and not his.
During cross examination, it was put more than once to the witness that his funds read gone towards the purchase of the land. He was consistent in denying that that was so, and he repeated that his father had contributed the purchase price, though agreeing that an amount of $9,625, referred to in folio 22 of the record, would have been paid from the bank account of Kalliecharan Brothers, and in the books of the partnership, his personal drawings account had been charged with the amount. He identified that amount as having been the down payment for the land, and maintained that the amount was not provided by him.
Mahabir George Bissoon, a Government pensioner, testified for the appellant. He described himself as a close friend of Dhanpaul Kalliecharan over a 30-year period, and said that he had known his son Harold, the appellant, for some fifteen (15) years.
He said that the extent of the friendship was such that Dhanpaul often discussed financial matters with him. He testified that Dhanpaul had informed him of the purchase by him of the Gulf View land in 1980. He had been shown cash amounts of $35,000.00 and had checked such cash at the home of Dhanpaul who had told him that that cash was to make a down payment on a parcel of land for Harold. He said that he recalled that incident distinctly, and further that Dhanpaul had told him that the cost of the land he intended to purchase was in the vicinity of $96,000.00.
Dhanpaul Kalliecharan's evidence, for the appellant, was given in the form of an affidavit dated 4th June, 1992 and filed on 6th April, 1993, in which he confirmed the information contained in a letter of 11th May, 1992 to the respondent, as under:–
“1, Todd Street,
San Fernando.
May 11, 1992.
Board of Inland Revenue,
Trinidad House,
Port of Spain
Dear Sirs,
Re: Harold Kalliecharan Income Years 1980 & 1981
This is to confirm that the funds used by the above-named in the purchase of the property at Gulf View, La Romain, in 1980 were provided by me. The down-payment of $10,000 was taken from the business account and the balance of $86,625 was given by me.
When the property was disposed in 1981, $40,000 of the sale proceeds was given to Vedya to assist in the purchase of a vehicle and the balance of $55,000 kept by me.
As already advised in various communications to you, my sources of funds were accumulated savings from business operations over the past fifty years, interest received from investments and the proceeds of sale of the following properties;
(a) the Milne-Holmes estate to the Government of Trinidad and Tobago;
(b) property at Siparia sold to D. Samaroo (where Republic Bank is now located);
(c) property on High Street, San Fernando sold to Macool.
In addition, as already reported, I had fixed deposits totalling over $300,000 which yielded interest of circa $26,000.00 per annum, and all the funds have since been given to my children.
Very truly yours,
(Signed) Dhanpaul Kalliecriaran”
An attempt to cross-examine this witness at his home in Todd Street, San Fernando following the service...
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