| 17/5/2012 |
HOME
FSS
Downloads
|
| Board of Special Commissioners - Cases |
| Case No. 47/58 |
Decided: 31 March, 1959 |
|
|
Refund of tax on rent payments that had been reimbursed to tenants following an order by the Rent Regulation Board - article 67(1), now 48, Income Tax Act
|
Appellant requested the refund of tax that had been charged on rent she had been ordered by the Rent Regulation Board to reimburse to tenants. The Commissioner refused, claiming that the assessments had been validly raised and decisions such as those taken by the Rent Regulation Board did not render such assessments defective. The original assessments were, therefore, to be considered final and conclusive.
The Board observed that the Commissioner had completely ignored the retroactive effect of decisions by the Rent Regulation Board. The Rent Restriction (Dwelling Houses) Ordinance provided that "Where at any time after the commencement of the Ordinance the rent of any dwelling house exceeds the fair rent as determined ... notwithstanding any agreement to the contrary whether made before or after the commencement of this Ordinance, be irrecoverable from the tenant, and, if it is paid by the tenant, shall be recoverable by him or my any person claiming through him from the person to whom it was paid or his heirs...."
This was not the case of a voluntary agreement entered into by the landlord and the tenant reducing the rent retroactively, but the determination of an indivisible payment made to appellant. Had the Rent Regulations Board increased the rent, the relative income would have been apportioned over the years. It would not have been considered reasonable to bring to charge the whole amount in the year in which it was effectively paid.
Appellant had refused to take up the Commissioner's suggestion to deduct the amount from his chargeable income in respect of the year in which the reimburment was effected, in terms of sub-article 10(h) of the Income Tax Act. The Board expressed its doubts as to whether this was legally correct. Sub- article 10(h) dealt with profits from trade, business, profession or vocation, whereas profits from rent were dealt with in another sub-article 10(f). Appellant and his wife were not traders and could not benefit from the provisions of sub-article 10(h).
|
|
|
|
|