| 20/5/2012 |
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| Board of Special Commissioners - Cases |
| Case no. 18/54 |
Decided: 28 July, 1954 |
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No deduction is allowed for expenses (a) in connection with the partition of property and (b) in respect of maintenance of property - article 10(1), 10(2), 11(c) and 79(3), now 14(1), 14(2), 26(c) and 96(1), Income Tax Act
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Appellant claimed a deduction in respect of (a) expenses incurred in the partition of property and (b) expenses incurred in the maintenance of his property.
Regarding (a), the Board held that the expense was of a capital nature. A partition has absolutely nothing to do with the production of the income.
Regarding (b), the Commissioner maintained that the only deduction possible was that provided for by G.N. 684 of 1950. Any excess over such amount was not deductible. Besides the expense had been made "for the enduring benefit " and "once and for all" and, therefore, was of a capital nature. The Board held that it was not necessary to consider whether the expense was of a capital nature: either the expense was of a revenue nature (in which case the provisions of G.N. 684 were to apply), or of a capital nature (in which case the deduction is excluded by article 11(c)).
Appellant also contended that: (1) G.N. 684 had not been tabled in terms of article 79(3); (2) G.N. 684 was "ultra vires" as the empowering article 10(2) had not been enacted for this purpose; (3) the assessment referred to basis years 1949 and 1950 while G.N. 684 was published on 19 December, 1950.
Regarding (1) the Board held that the said G.N. had been tabled on 5 January 1951. Regarding (2) it was held that if appellant wished to contest the validity of the G.N. he could have sought redress elsewhere but not before the Board. With respect to (3) the Board said that the said G.N. was indeed retroactive, in fact rule 3 provided that the Rules were to apply as from the year of assessment 1950 - while the expenses in question were incurred during the basis year 1950.
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