| 29/8/2008 |
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| Board of Special Commissioners - Cases |
| Case No. 14/52 |
Decided: 14 February, 1953 |
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Taxability of gifts received by a variety artiste - earnings from vocation - article 5(1)(a), now 4(1)(a), Income Tax Act
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A variety artiste insisted that the amounts of Lm140, Lm110 and Lm75 which she had deposited in the bank were not taxable as these were gifts from male friends who wished to help her abandon her present way of life.
The Board considered article 5(1)(a) that charges to tax gains or profits from any trade, business etc. Appellant was in the habit of receiving presents from her male friends. The gifts must have been recurrent and of considerable nature since she was able to save at least Lm11,500 in ten years. This showed that she did not live merely on her monthly salary of Lm26 but also on the gifts given to her by her male friends.
This money, even if given to appellant for the purpose of helping her to start a new life, was given to her in consideration of the pleasant company she had rendered to her male friends and not merely for merely altruistic motives. The Board did not accept that no "commodity" was given in exchange.
Quoting from British tax cases, the Board held that voluntary gifts are normally exempt from tax, but when recipient renders services which are the real grounds for making the gift, the recipient is taxable even though he may have had no legal claim to the money received.
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