| 29/8/2008 |
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| Court of Appeal - Decisions in Income Tax Cases |
| Case No: 7 |
Decided on 16 February 1952 |
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Reaffirmation That The Income For 1948 Was Taxable For Year Of Assessment 1949. Re-Invested Profits Remain Taxable. No Allowance For Losses Made By A Company.
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In re-confirming the taxability profits earned in 1948 for year of assessment 1949, an indication was given that the departmental practice referred to in the summary of Case No: 3 to the effect that no assessment was raised on the income for 1948 when the person had died before 1st January 1949, was a result of a ministerial promise made in Parliament which was apparently never translated into law.
The Court ruled that re-invested profits could not be exempt, and established clearly the principle that profits are to be computed according to normal accountancy rules. Moreover, re-investment of profits was capital in character and no deduction could be allowed.
As regards losses made by the company, the Court did not enter into the theory whether shareholders could obtain the benefit of deductions for such losses in their own personal assessments. The Board had found as a fact that the company had made profits and the Court refused to consider the matter further, that being a point of fact.
BSC Case No: 20/50
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