Taylor v The Board of Inland Revenue
| Jurisdiction | Trinidad & Tobago |
| Judge | Koylass, C.,Burke, M.,Julumsingh, M. |
| Judgment Date | 08 December 1983 |
| Court | Tax Appeal Board (Trinidad and Tobago) |
| Date | 08 December 1983 |
| Docket Number | I 105 of 1982 |
Tax Appeal Board
Koylass, C.; Burke, M.; Julumsingh, M.
I 105 of 1982
L. Bridgeman for appellant
E. John-Charles for respondent
Revenue Law - Income tax — Unemployment levy — Appellant appealed against an additional assessment to income tax for the year of income 1975 an a consequential assessment to unemployment levy — Assessment to income tax of $450 had been increased to $16,167.40 and an assessment to unemployment levy of $1,467 had been made following a tax audit examination undertaken by the respondent which resulted in an increase in the chargeable income of the appellant — Whether on the evidence any of the deposits treated by the respondent as business deposits of the calypso tent had been accounted for as coming from another source — Whether on the evidence any part of the amount of $31,140.96 treated as business expenses met by cash from the business receipts came from another source — Appeal was allowed — Assessments referred back to the respondent for re — assessment on the basis of a reduction of the appellant's share of profits from the calypso tent for $20,699 to $15,699.
By notice filed on 14th October, 1981, the appellant appealed against an additional assessment to income tax for the year of income 1975 and a consequential assessment to unemployment levy.
The assessment to income tax of $450 had been increased to $16,167.40 and an assessment to unemployment levy of $1,476 had been made following a tax audit examination undertaken by the respondent, which resulted in an increase in the chargeable income of the appellant as under –
“1. Chargeable Income as per Return– 4, 205
Add: Half share of unreported income – 20,699
Unreported interest received – 12,516
Loss in respect of property at Robinsonville – (420)
Expenses allowed in respect of property at Old St. Joseph Rd. – (171)
Claim for wife who is gainfully employed is disallowed – 600
Adjusted Chargeable Income 4,205
– 37,429”
For the purpose of assessment to unemployment levy, the respondent had added an amount of $2,100, being the annual rateable value of owner-occupied tax exempt property.
The grounds of appeal were as follows:–
“(a) Statement of allegations of fact. The calculation of unreported income as shown in para. 1(a) of the tax audit report is incorrect and not in accordance with the returns filed.
(b) Statement of the reasons to be advanced in support of appeal. The assessments are incorrect and excessive as several deposits were erroneously calculated as income.”
In paragraph 13 of the statement of case, the respondent's contentions were stated as under –
“The respondent will contend that the Appellant failed to show that any deposit contained in the calculation of unreported income as shown in paragraph 1 of the audit report dated 4th March, 1980 was not derived from a source of income during the year of income 1975.”
At the hearing, Mr. Bridgeman informed the Court that the only aspect of the amended assessments that was being opposed was in respect of the sum of $20,699, treated by the respondent as unreported income from the calypso tent.
The relevant extract from the tax audit report reads –
“1. HALF SHARE of UNREPORTED INCOME FROM BUSINESS – $20,699
(a) The taxpayer operated a Calypso tent jointly with Mr. Slinger Francisco, sharing profits equally with him. The taxpayer's half share in these profits was shown in the tax return at $5,189. However, on an examination of the various bank accounts and other materials produced the taxpayer's half share of unreported income from this joint Venture has been computed at $20,699.”
The additional income of $20,699 had been computed as under
1. Total bank deposits – A/C No. 18477 – Bank – 101,177.81
of Nova Scotia, Park Street
2. Less transfer from A/C No. 9836 – Bank of – 10,000.00
Nova Scotia, Independence Square
3. Total business deposits – 91,177.81
4. Business expenses met by cash – 31,140.96
5. Adjusted gross income – 122,318.77
6. Less gross income as per statement of Receipts and Expenditure – 80,920.00
7. Increase in receipts – 41,398.77
8. Half share attributed to appellant – 20,699.00
The sum of $31,140.96 representing business expenses met by cash in item 4 above was arrived at as under –
Total business expenses as per statement of receipts and expenditure – 70,541.96
Business withdrawals from savings account 18477 – Bank of Nova Scotia, Park Street – 39 401.00
Business expenses met by cash – 31,140.96
The tax auditor had in fact used the Savings Account (No. 18477 – Bank of Nova Scotia) as representing the deposits and withdrawals of the calypso tent operations and had made the following calculations:–
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(1) From the total deposits of $101,177.81 he had deducted a deposit of $10,000, which had been identified to be a transfer from another account.
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(2) To the sum of $91,177.81 treated as business deposits, he had added $31,140.96 – the difference between the total bank withdrawals and the total expenses claimed by the appellant. It was, therefore, assumed that the appellant's expenses in that amount had been met by cash out of business receipts.
At the outset of his evidence, the appellant stated that he had in his possession a bundle of documents which had been available at the time of the field audit, but it was never examined by the tax auditor. The audit, he said, had never been completed.
The appellant testified that two amounts deposited into his savings account had not been receipts from the calypso tent. These were $6,960 deposited on 4th...
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