| 29/8/2008 |
Bil-Malti
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| Board of Special Commissioners - Cases |
| Case no. 12/53 |
Decision: 9 July, 1953 |
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A deduction in respect of travelling expenses was not allowed as it was not deemed to have been necessarily incurred in the production of the income but made for the enduring benefit of the business - article 11(c), now 26, Income Tax Act
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The Commissioner had not allowed a deduction of Lm150 in respect of travelling expenses. Appellant had travelled to London to hold negotiations with the owners of an insurance company and obtain exclusive representation in Malta. Appellant had been accompanied by his wife but the deduction he was claiming was in respect of the expenses incurred by him only. He claimed that he would not have travelled to London had it not been necessary for his insurance business.
The Board held that article 10 allowed as a deduction all out-goings and expenses wholly and exclusively incurred in the production of the income. It was not enough that the expense was made in the course of, or arose out of, or was connected with the trade. The expense was to have been such as without it there would not have been any income: "ex necessitate", because "exclusively" means "necessarily".
It was clear that the said expense was not "necessarily" incurred in the production of the income. The expense had been made for the enduring benefit of the business and, having served to put the business in the position of earning profits, was clearly capital in nature and, therefore, not deductible since such expense was not allowed as a deduction by article 11(c).
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