| 20/5/2012 |
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| Board of Special Commissioners - Cases |
| Case No. 4/59 |
Decided: 27 June, 1959 |
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Capital allowances may not be accrued - article 10, now 14, Income Tax Act, article 67, Income Tax Act - now article 48, Income Tax Management Act
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In his statement of income for two consecutive years during which no profits were registered from his trade, appellant failed to claim the wear and tear allowance to which he was entitled. He endeavoured to make amends by including a claim for these allowances in arrears the following year when a profit was made. His claim was refused by Revenue.
Sub-article 10(1) clearly provides that deductions for outgoings and expenses are allowable only in so far as they were incurred during the year preceding the year of assessment; a claim for the accrual of outgoings cannot, therefore, be entertained.
Had appellant submitted his claim for capital allowances in the relevant years, any loss which he had incurred and which could not be set off against income from other sources, would have been carried forward and set off against what would otherwise have been the total income for subsequent years in succession, in terms of sub-article 10(1)(g)(iii) of the Income Tax Act. Such set off cannot, however, be effected at this stage because it would involve the reconsideration of assessments for previous years that had become final and binding once they had not been objected to.
Appellant endeavoured to reach his goal by invoking the provisions of Article 67 but the Board agreed with Revenue that these were inapplicable in this case once they contemplated the refund of tax paid in access when in actual fact appellant had not been charged any tax on income arising from his trade since no profits were registered. One cannot even consider setting off such allowances against income earned from other sources.
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