| 8/2/2012 |
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| Court of Appeal - Decisions in Income Tax Cases |
| Case No: 12 |
Decided on 21 January 1955 |
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Taxability Of Profit Made From The Sale Of Immovable Property Acquired For The Purpose Of Profit Making By Sale.
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The appellant was a dealer in clothing apparel, both by retail and wholesale. It was however proved that he had also made several transactions in property (at a profit) during the early 1940s. In 1943 he bought a block of apartments which he refurbished to make good war damage, and resold in 1948. The profit made on this transaction was the subject of the current appeal. Various excuses and reasons were brought forward by the appellant as to why the several transactions in property had taken place, and why the profit in question should not be taxed.
The Board hinted that it favoured an old principle, found also in Malta's Commercial Code, to the effect that any purchases made by a trader were to be deemed to be made in trade unless the contrary is proved. In any case, the Board came to the conclusion that when all the facts of the case were reviewed, the transaction in question was an act of trade, and that the profit was consequently taxable.
The Court confirmed the Board's decision and stated that, as the facts proved, the purchase of the property had clearly been made "for the purpose of profit making by sale". This was one of the criteria which the I.T.A. specifically considered to lead to taxability.
BSC Case No: 8/54
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