| 6/1/2009 |
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| Board of Special Commissioners - Cases |
| Case No. 26/69 |
Decided: 26 August, 1969 |
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Premium paid by lessee on being granted permission to make structural alteration - not capital in nature - article 5 now 4, Income Tax Act
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Appellant's wife had charged lessee a sum of money on granting him permission to make structural alterations on condition that when giving up the lease the lessor may be requested to reinstate the premises in its present form. Revenue charged tax on the income and appellant pleaded that it was capital in nature.
The question is one of interpretation and as it had been held : "the only safe rule is to look at the words of the enactments and see what is the intention expressed by those words." (Coltness Iron Co v Black, I.T.C. 287).
There is no doubt that the profits arose out of a property deal and were prima facie chargeable to tax in terms of article 5. Moreover at the end of the lease the owners had the right to claim to request the lessee to reinstate the premises in its present form at his own expense so the owners will not suffer any loss or prejudice in their property.
The Board agreed with Revenue's interpretation and rejected the appeal.
An appeal was entered before the Court from this decision (see case no. 79).
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