Sabga v The Board of Inland Revenue

• Jurisdiction: Trinidad & Tobago
• Judge: Koylass, C.,Burke, M.,Julumsingh, M.
• Judgment Date: 01 January 1981
• Court: Tax Appeal Board (Trinidad and Tobago)
• Docket Number: I 54/1979
• Date: 01 January 1981

Tax Appeal Board

Koylass, C.; Burke, M.; Julumsingh, M.

I 54/1979

Sabga

and

The Board of Inland Revenue

Appearances:

M. Jobity for the appellant.

A. Jack for the respondent.

Cases referred to:

• (1) Hills and Grant Limited v. Hodson [1934] Ch. D. 53.

• (2) Roytrin Nominees Limited v. The Board of Inland Revenue (1967–77) 1 T.T.T.C. 458.

• (3) Case 8, 18 C.T.B.R. (N.S.) 35.

Application for order for amplification of statement of case by the respondent.

Civil Practice and Procedure - Statement of Claim — Amendments — Whether the statement of case should be sent back for amplification where the particular subsections of section 23 of the Income Tax Ordinance was missing — Consideration of Hills and Grant Ltd. v. Hodson (1934) Chancery Division 53 — Fundamental differences between statement of claim and statement of case — Finding that the statement of case should be amplified — Finding that there are fundamental differences between a statement of claim and a statement of case — Finding that it was just and fair that the party should be informed of the subsection or subsections of section 23 upon which the other party sought to rely — Rule 26(2) and 27(1) of the Appeal Board Rules, 1967 — Section 23 of the Income Tax Ordinance.

The appellant appealed an additional assessment of income in the sum of $100,000. The respondent filed a statement of case stating its contentions and the reasons in support of the assessment appeal against and stated at paragraph 10(c) that it relied on section 23 of the Income Tax Ordinance. This section contains several subsections and paragraphs and takes up about five pages of the Ordinance.

The appellant asked the Board to order the respondent to amplify paragraph 10 to specify the section or sections of section 23 that it relied on.

Field:

The object of the statement of case is to inform the court and the appellant of the issues of law and of fact involved so as to save time at the hearing and the fact that an answer has not been filed is no justification for refusing to grant an order for amplification; in this case, it is evident that if the relevant subsection or subsections were specified in paragraph 10(c) of the statement of case considerable time will be saved at the hearing as the appellant will not then have to refer individually to each subsection to satisfy the court.

Ordered that the statement of case be sent back to the respondent for amplification of paragraph 10 (c); no order as to costs.

1 The appellant is applying under rule 26(2) of the Appeal Board Rules, 1967 (hereinafter referred to as “the Rules”), for an order that the statement of case filed on the 27th day of November, 1980, be sent back to the respondent for amplification.

2 The application was filed on 1st May, 1981, and reads as follows:–

3 Application is hereby made to the Appeal Board pursuant to Rule 26(2) of the Appeal Board Rules 1967 that the Board cause the statement of claim filed herein on the 29th day of November, 1980 to be sent back to the Inland Revenue for amplification as follows:

Under paragraph 10(c):

Specifying the section or sections of Section 23 that are relied on.

And for an Order that the Inland Revenue pay the costs of this application.

4 In his notice of appeal tiled on 12th July, 1979, the appellant had challenged an additional assessment in the sum of $100,000. The grounds of appeal are as follows:–

• (a) Statements of Allegations of fact:

  • (i) The appellant is a Director inter alia of Anthony N. Sabga Ltd. and his office is at ANSA Building (4th Floor) Corner Queen & Henry Streets, in the City of Port-of-Spain.

  • (ii) In or about December, 1964, the appellant sold certain of his assets to a Company called Norman Holdings Ltd. in exchange for shares in that Company and an unsecured loan of $100,000.00. Norman Holdings Limited was incorporated in the Bahamas and carried on no business in Trinidad and Tobago.

  • (iii) In or about December 1964, Norman Holdings Limited advanced the sum of $100,000.00 on loan without, interest to Anthony N. Sabga Limited and some time towards the end of 1969 it was decided to wind up Norman Holdings Limited.

  • (iv) As Norman Holdings Limited was indebted to the appellant the loan by Norman Holdings Limited to Anthony N. Sabga Limited was transferred in the books of Anthony N. Sabga Limited to the credit of the appellant's account with Anthony N. Sabga Limited.

• (b) Statement of the reasons to be advanced in support of the Appeal:

  • (i) The appellant received no income whosoever from or ascribable to the said debt of $100,000.00 to him transferred in the books of Anthony N. Sabga Limited from Norman Holdings Ltd.

  • (ii) The appellant is being taxed in his personal capacity on a debt assignment as though it was a distribution, to him.

  • (iii) The additional assessment is unjustifiable and/or not in accordance with the provisions of the Income Tax Ordinance.

5 Rule 26 of the Rules prescribes the matters that are to be set out in a statement of case and also provides for sending back the statement of case for amplification or amendment. This rule reads as follows:–

26

(1) In addition to the documents referred to in section 43D(6) of the Ordinance, the Inland Revenue shall, within twenty-one days, after the service upon them of a notice of appeal — (a) fie in the Registry a statement of case setting out — (i) the assessment, directive or other decision of the Inland Revenue appealed from; (ii) the material facts upon every point specified in the notice of appeal as a ground of appeal; (iii) the reasons in-support of such assessment, directive or other decision; and (b) serve a copy of the said statement on the appellant. (2) The Court may cause the statement of case to be sent back to the Inland Revenue for amplification or amendment, and the Inland Revenue shall within the time specified by the Court – (a) amplify or amend the statement of case and file the same in the Registry; (b) serve a copy of the amended or amplified statement on the appellant.”

6 In accordance with that rule, the respondent filed a statement of case and stated its contentions and the reasons in support of the assessment appealed against at paragraph 10 thereof. That paragraph reads as follows:–

7 10. The respondent will contend:

• (a) That the appellant failed to satisfy the respondent that the sum of 5100,000.00 paid by Anthony Sabga Limited to the appellant was not income subject to tax.

• (b) That it appeared to the respondent that the appellant has been assessed at a less amount than that which ought to have been charged and that the respondent is entitled to assess the appellant at such additional amount as according to its judgment ought to have been charged and in so doing has assessed the $100,000.00 paid by Anthony Sabga Limited during the year of income 1970 as a distribution under the provisions of Section 45 of the said Ordinance.

• (c) That the sum of $100,000.00 transferred by Anthony Sabga Limited to the appellant's Personal Account during the year of income 1970 is a distribution under the provisions of Section 23 of the Income Tax Ordinance, Chapter 33 No. 1.

• (d) That the purported arrangement referred to in paragraph 2 of the Notice of Appeal was not a bona fide commercial transaction.

• (e) That the purported arrangement referred to in paragraph 2 of the Notice of Appeal is an artificial and fictitious transaction which would reduce the amount of tax payable by the appellant and that the respondent is entitled to disregard the purported transactions between Norman Holdings Limited and Anthony Sabga and the purported transaction between Norman Holdings Limited and Anthony Sabga Limited and to assess the appellant accordingly.

• (f) The respondent maintains that the assessment is justifiable in law and fact.

8 The amplification sought by the appellant relates to paragraph 10(c) of the statement of case, in which the respondent contends that the amount of $100,000 was a distribution...