| 21/8/2008 |
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| Court of Appeal - Decisions in Income Tax Cases |
| Case No: 95 |
Decided: 17 June, 1974 |
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Income Arising From A Scholarship Granted By Government To One Of Its Employees
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This was the third of three Government scholarship cases considered by the Court of Appeal. The others were cases nos. 32 and 59.
Taxpayer was and remained a full time Government employee and actually received a promotion during the time he was studying at the University on a Government scholarship. He received his normal salary plus certain other payments. He was officially advised that he had been granted "sabbatical leave" for the duration of his cause. The revenue raised assessments on his normal salary.
The tribunals held that all receipts were due to be exempt as a scholarship. Taxpayer had during the period of his studies rendered no services connected with his employment. He was actually studying full time at the University. He was barred from doing any work which could have interfered with his studies, and Government could, on certain circumstances, insist on the refund of all payments made to him. This applied also to the amounts received as salary: something that was impossible in the case of a normal salary.
(Note: the law has since been changed to ascertain payment of the tax on the normal salary in such cases).
BSC Case No: 1/73
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