| 8/2/2012 |
HOME
FSS
Downloads
|
| Board of Special Commissioners - Cases |
| Case No. 9/64 |
Decided: 08 July, 1964 |
|
|
A scholarship awarded to civil servant need not be specified as such - income of government employee sent on a full course of study was exempt from tax - article 8, now 12, Income Tax Act
|
Appellant, a teacher, was awarded a scholarship by Government to follow a University course leading to a first degree. During the term of his scholarship appellant was not receiving his normal salary but a variety of allowances, some having relation to his normal salary and others not. The Commissioner based his assessment on the decision of the Court of Appeal in case no 32, where it was held that tax was to be charged on an amount equal to the salary the taxpayer would have normally received, though any allowances received over and above were exempt. Appellant claimed that all allowances were tax-exempt.
The Board noted that the merits of the case referred to by the Commissioner were somewhat different from those under review. In the latter case the course of study was essential for taxpayer to qualify for a promotion, whereas in this case the scope of the scholarship was the advancement of knowledge. Moreover, the merits of the Court of Appeal case were limited to the excess income and the Court, therefore, had narrow grounds to decide upon.
The Board disagreed with the Commissioner's contention that the income received was not "arising from a scholarship" and was thus not exempt in terms of article 8 of the Act. The Board ruled that it was not necessary for a scholarship to be described as such when granted, nor need it arise from any fund, foundation, bursary or similar sources. When a Government employee was sent on a full time course of study his income from Government sources became income from a scholarship and hence exempt.
An appeal was entered before the Court from this decision (see case no. 59).
|
|
|
|
|