Maharaj v The Board of Inland Revenue
| Jurisdiction | Trinidad & Tobago |
| Judge | Besson, C.,Burke, M.,Julumsingh, M. |
| Judgment Date | 13 November 1978 |
| Court | Tax Appeal Board (Trinidad and Tobago) |
| Docket Number | 114/1976 |
| Date | 13 November 1978 |
Tax Appeal Board
Besson, C.; Burke, M.; Julumsingh, M.
114/1976
G Hislop for the appellant.
Rita Persaud for the respondent.
No case referred to.
Appeal against additional assessment of the income tax and unemployment levy.
Revenue Law - Assessment of taxes — Reasonable grounds for objection — Whether the additional assessment was excessive where the evidence provided was that the deposits could not have been accumulative business receipts — Finding the assessment was excessive.
An additional assessment was made on the appellant's income and its taxable income was increased on the ground that there were four deposits to the appellant's bank account of $5,000 each. These could not be accounted for as non-taxable deposits and so was classified as unreported sales of the appellant's business. The appellant attempted to discharge the onus of proof placed on him by establishing that the four deposits could not conceivably represent store sales and linking them to the deposits on a land transaction. This explanation was consistent with the contents of a letter to the respondent.
where the taxpayer communicates to the respondent reasons for an objection to additional assessment, they must be considered in a timely manner and where reasonable the taxpayer's onus of proof may be discharged, in this case, the appellant had a sufficiently consistent and plausible explanation and had discharged its burden of proof that the assessment was excessive.
Appeal allowed, adjusted chargeable income reduced, assessment referred back to the respondent for re-assessment of tax.
This is an appeal against an additional assessment to income tax and unemployment levy in respect of the year of income 1973.
In the original assessment to income tax for 1973 the appellant had been assessed on a chargeable income of $8,227.00 and had paid a tax of $1,639.45.
By an additional assessment, notice of which was given on 30th September, 1975, the chargeable income was increased to $47,579 as a result of the following adjustments made by the respondent:–
(a) Unreported sales — $30,311.13
(b) Purchases — 9,105.35
(c) Watchman expenses — 840.00
(d) Bad debts — 396.25
Sub-total — $40,652.73
Less amount under Annual
Rateable Value allowed — $900.00
TOTAL — $39,752.73
Tax computed on the adjusted chargeable income was $22,497.40.
The appellant objected to the additional assessment on 17th November, 1975. Having reviewed the assessment the respondent informed the appellant by letter of 12th November, 1976, of the following adjustments which would have had the effect of reducing the chargeable income by a sum of $7,022.00 to $40,957.00 and the tax to $18,284.20. Details of this adjustment appear hereunder:–
(a) Capital receipt from Cynthia Surybally (being part payment for land sold) — $1,000.00
(b) Capital receipt from Dr. Collymore for lands sold — $2,600.00
(c) Receipts for Securities sold — $1,610.00
(d) Travelling and subsistence not originally claimed — $720.00
(e) House rates in respect of property at High Street, Princes Town, not originally claimed — $270.00
(f) House and Water Rates in respect of Property at Ariapita Avenue, Port-of-Spain — $822.00
In a Notice of Appeal dated 15th December, 1976, the appellant appealed on the grounds that the Revenue treated as income the total amount of bank deposits disclosed by bank statements. The reason advanced in support of the appeal was that the assessment as to the volume of the taxpayer's income was erroneous.
In the Statement of Case of 18th May, 1977, the respondent submitted that the appellant –
(a) failed to disclose in his Return of Income his true income since his total deposits with his Banker during the year of income 1973 amounted to $526,844.03 and his non-business deposits of $199,565.52, together with reported sales as per the Return in the sum of $296,957.38 amounted to $496,522.90 thus leaving the balance of $30,311.13, which in the absence of proper explanation by the appellant was treated as chargeable income/profit;
(b) is not entitled to claim expenses in respect of purchases amounting to $9,105.35 for the following reasons:
(i) Duplicated purchases — $10,001.60
(ii) Credit notes not brought to account — 2,532.74
Sub-total — $12,534.34
Less understated purchases as per Return — 3,428.99
TOTAL — $9,105.35
(c) is not entitled to a deduction in respect of $840.00 paid to watchman of the appellant's owner occupied property;
(d) is not entitled to the claim of $396.25 as a bad debt because the sales relating to this sum were not taken into account as income.
At the hearing, the items appearing at (b), (c) and (d) above were not contested, and in respect of (a), the issue was confined to a sum of $20,000 of the original amount of $30,311.13 adjusted by the respondent as “Unreported Sales”.
The appellant gave evidence and for the respondent Mr....
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