| 17/5/2012 |
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| Board of Special Commissioners - Cases |
| Case No. 1/74 |
Decided: 2 February, 1976 |
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Interpretation of the special provisions in respect of formerly undeclared income - article 5B, now 8, Income Tax Act
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Article 5B(2) of the Income Tax Act provides that "the income to which this section applies shall be determined by reference to any capital which existed on the 31st December, 1971, being an accumulation thereof or the source giving rise to the said income ..." Appellant argued that the word "or" implied that the Income Tax Act provided for two distinct items of chargeable income and the choice rested with the taxpayer and not the Commissioner; the Commissioner was not, therefore, correct in bringing to charge the whole of the capital held on 31 December, 1972 as this included both the original capital and the accumulation thereof.
The Board observed that appellant had declared that he had omitted to declare not only capital he had brought over with him when returning from Australia in 1967, but also income derived from the sale of agricultural goods and the sale of premises. The appeal would have been justified had the whole of the undeclared income been derived from the original capital. In the meantime, however, appellant had increased such capital from other sources of income on which he had earned interest that had gone undeclared. It was not possible to quantify the income derived from the different sources. Sub-article 5B(2) did not provide for such contingencies.
Appellant had been at liberty to consider whether the alternative provisions of sub-article 5B(8) would have suited his particular circumstances better and been to his advantage. The Commissioner, however, was correct in maintaining that once appellant had based his application of sub-article 5B(2) and the prescribed period of application had lapsed, no changes could be considered.
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