| 21/8/2008 |
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| Board of Special Commissioners - Cases |
| Case No. 13/50 |
Decided: 18 September, 1950 |
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Overseas service allowance and cost of living allowance considered as income for the purposes of the Income Tax Act - articles 5(1)(b), 10(1) and 11(a), now 4(1)(b), 14(1) and 26(a), Income Tax Act
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Appellant objected against the fact that an "overseas service allowance" and a "cost of living allowance" received from a private company had been charged to tax together with his salary, on the grounds that article 10(1) allowed as deductible those expenses which are wholly and exclusively incurred in the production of the income.
On the other hand the Commissioner maintained that the said article 10(1) was to be read jointly with article 11(a) which prohibited deductions for expenses which were of a domestic or private nature.
Appellant drew an analogy between his case and two particular sections in the U.K. Finance Act, but the Board held that the said two sections dealt with exceptions and, as such, served only to confirm the rule. The Board also noted that article 5(1)(b) of the Income Tax Act brought to charge not only gains and profits from an employment which consisted in cash but also where these were "in kind". It was logical to conclude therefore that the law intended to charge those gains or profits when these were in the form of a cost of living allowance.
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