| 7/2/2012 |
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| Board of Special Commissioners - Cases |
| Case No. 13/72 |
Decided: 12 January, 1973 |
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Contribution to Pension Schemes are only deductible if approved by the Commissioner; stamp duty paid on the receipt issued against payment is not deductible once it is not incurred in the actual production of the income; expenses incurred in maintenance of knowledge are only deductible if they relate to a specific condition of the contract of service - article 10, now 14, Income Tax Act
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Appellant, a lecturer by profession, claimed that he had been entitled to an allowance on (a) contributions paid to an Insurance Scheme (b) stamp duty payable on the receipt of his salary and (c) annual subscriptions to learned societies.
The Board referred to its numerous decisions that no deduction could be allowed if a contribution is made to a fund that is not approved by the Commissioner. The Pension Scheme referred to by appellant did not enjoy such approval. Moreover approval is granted by the Commissioner at his sole discretion and the Board did not have the power to interfere with the use of that discretion except if exercised contrary to law or against the rules of natural justice.
Stamp duty became due on the receipt of the income. It is not attached to the income but to the payment of the salary. Once the expenditure is not incurred in the production of income it does not qualify for deduction under article 10 of the Income Tax Act.
Expenses incurred in maintenance of knowledge or in keeping oneself up to date are not deductible except when it is expressly laid down in a contract of service and there is a legal obligation on the employee to be a member of a particular society. In the negative the expenditure must be considered as a voluntary one and is not deductible.
The Board's attention was drawn to an agreement entered into by the Commissioner and the staff of the University whereby the latter were to be allowed various deductions including one for subscriptions to learned societies. The Board ruled that the Commissioner had been acting beyond the scope of his powers under the Income Tax Act. The power of exemption lies with the Minister of Finance and the agreement was, therefore, null and void.
An appeal was entered before the Court from this decision (see case no. 97).
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