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Volume 16 First Supplement

Publication Date: Jan 2002

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DIGEST OF CASES REPORTED

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  Decision No. Download
PENALTY TAX    

agreement on income tax undercharged - the taxpayer not in possession of the necessary books and accounts - ss 51(2), 68(4) and 82A of the Inland Revenue Ordinance ('IRO')  

D59/01 Download D59/01 (DOC) - English Download D59/01 (PDF) - English

submission of incorrect tax returns and failure of filing any tax return for several years of assessment without reasonable excuse - gross dereliction of duty - finality of the assessable profits once agreement was reached between the parties - general starting point for incorrect returns was 100% of the tax undercharged - some weight must be given to the length of delay and the level of award as reflected in past decisions of this Board - penalty imposed ranges from 15% to 97% of the tax undercharged - s 82A of the Inland Revenue Ordinance ('IRO')  

D50/01 Download D50/01 (DOC) - English Download D50/01 (PDF) - English

submission of incorrect tax returns by corporate taxpayer without reasonable excuse - ignorance or unfamiliarity with accounting matters or the fact that it entrusted professionals to discharge its legal duties on its behalf is no defence - no deliberate intention to evade profits tax or understate the same is not a defence - penalty imposed in the rate of 103% of the tax undercharged - ss 68(4), 82 and 82A of the Inland Revenue Ordinance ('IRO')  

D46/01 Download D46/01 (DOC) - English Download D46/01 (PDF) - English

taxpayer's return filed late - failure to inform Commissioner within time allowed his chargeability to tax - whether reasonable excuse for late filing existed - likelihood for continuing default without detection - ss 51(1), 51(2), 66(3), 68(4), 82A(1)(d) and 82A(1)(e) of the Inland Revenue Ordinance ('IRO')  

D32/01 Download D32/01 (DOC) - English Download D32/01 (PDF) - English

understatement - bad case - obstructive - whether 210% of the tax undercharged excessive - compound interest  

D43/01 Download D43/01 (DOC) - English Download D43/01 (PDF) - English
PERSONAL ASSESSMENT    

deduction - home loan interest - refinance of mortgage - ss 42, 68(4), 68(8)(a) and 68(9) of the Inland Revenue Ordinance ('IRO')  

D39/01 Download D39/01 (DOC) - English Download D39/01 (PDF) - English
PROFITS TAX    

acquisition and sale of property - adventure in the nature of trade - whether capital or investment asset - intention of purchaser at time of acquisition - burden of proof on taxpayer purchaser - whether tax chargeable on the profits of sale  

D21/01 Download D21/01 (DOC) - English Download D21/01 (PDF) - English

acquisition and sale of property - intention at time of purchase - burden of proof on purchaser to establish that property purchased for long term investment - adventure and concern in nature of trade - 'totality of evidence' approach - badges of trade - s 2(1) of the Inland Revenue Ordinance ('IRO')  

D28/01 Download D28/01 (DOC) - English Download D28/01 (PDF) - English

acquisition and sale of property - intention at time of purchase - burden of proof on purchaser to establish that property purchased for long term investment - rationale behind tendering a 'witness' - credibility - ss 14(1) and 68(4) of the Inland Revenue Ordinance ('IRO')  

D30/01 Download D30/01 (DOC) - English Download D30/01 (PDF) - English

deductible expenses - s 61 of the Inland Revenue Ordinance ('IRO') - whether entertainment expenses, office facilities expenses and equipment rental are incurred in the production of chargeable profit - onus of proof  

D33/01 Download D33/01 (DOC) - English Download D33/01 (PDF) - English

excessive - error or omission in the return - assessable profits not derived from Hong Kong - failure to supply information to the Inland Revenue Department ('IRD') - ss 64(1) and 70A of the Inland Revenue Ordinance ('IRO')  

D25/01 Download D25/01 (DOC) - English Download D25/01 (PDF) - English

operating charges - whether artificial - s 61 of the Inland Revenue Ordinance ('IRO')  

D56/01 Download D56/01 (DOC) - English Download D56/01 (PDF) - English

properties - whether for redevelopment  

D54/01 Download D54/01 (DOC) - English Download D54/01 (PDF) - English

property resold within short time - whether trade  

D26/01 Download D26/01 (DOC) - English Download D26/01 (PDF) - English

sale of property - s 2(1) of the Inland Revenue Ordinance ('IRO') - whether profits derived from the sale of the property assessable to profits tax - whether intention to purchase as family home 'genuinely held, realistic and realizable' - whether sole purchase in the name of taxpayers indicative of trading intention - onus of proof  

D36/01 Download D36/01 (DOC) - English Download D36/01 (PDF) - English

trader of or underwriter in the sale of foreign real property - whether sale proceeds taxable in Hong Kong - whether profit arose in or was derived from Hong Kong - ss 2, 14(1), 61 and 68(4) of the Inland Revenue Ordinance ('IRO') - Departmental Interpretation and Practice Note No 21 ('DIPN No 21')  

D38/01 Download D38/01 (DOC) - English Download D38/01 (PDF) - English

whether the sale of a property was trading in nature - the time span between the purchase and sale - the history of dealings in real property - burden of proof on the taxpayer - ss 2(1), 14 and 68(4) of the Inland Revenue Ordinance ('IRO')  

D45/01 Download D45/01 (DOC) - English Download D45/01 (PDF) - English

whether the sums payable by way of interest chargeable to tax - onus on the taxpayer to establish the identity of the lender - the twin conditions for deductibility imposed by s 16(2) of the Inland Revenue Ordinance ('IRO') - ss 14(1), 15(1), 16(1) and 16(2) of the IRO  

D58/01 Download D58/01 (DOC) - English Download D58/01 (PDF) - English
PROPERTY TAX    

rental not received by the taxpayer but by third party - whether rental subject to property tax - ss 2, 5, 5B(2) and 60 of the Inland Revenue Ordinance ('IRO')  

D55/01 Download D55/01 (DOC) - English Download D55/01 (PDF) - English
SALARIES TAX    

additional assessment - gratuity payment - refinance of mortgage - ss 8(1), 9(1) and 68(4) of the Inland Revenue Ordinance ('IRO') - ss 31I, 31IA and 31G of the Employment Ordinance ('EO')  

D51/01 Download D51/01 (DOC) - English Download D51/01 (PDF) - English

deduction - home loan interest - refinance of mortgage - s 26E of the Inland Revenue Ordinance ('IRO')  

D22/01 Download D22/01 (DOC) - English Download D22/01 (PDF) - English

employment - place of service - source of income - 60 days limit - whether liable to salaries tax - meaning of 'visit' - meaning of 'days' - s 8(1B) of the Inland Revenue Ordinance ('IRO')  

D37/01 Download D37/01 (DOC) - English Download D37/01 (PDF) - English

income - encashment of contribution of employer upon dissolution of superannuation scheme - ss 8(2)(cd) and 9(1)(ab)(i) of the Inland Revenue Ordinance  

D60/01 Download D60/01 (DOC) - English Download D60/01 (PDF) - English

whether an employment income arose in or was derived from Hong Kong - apportionment of the income - s 8(1A)(c) of the Inland Revenue Ordinance ('IRO')  

D34/01 Download D34/01 (DOC) - English Download D34/01 (PDF) - English

whether 'prevented' from giving the requisite notice of appeal - what are conclusive factors in determining the location of an employment - the 60-day rule - ss 8(1)(a), 8(1A)(b)(ii), 66(1A) and 68(4) of the Inland Revenue Ordinance ('IRO')  

D47/01 Download D47/01 (DOC) - English Download D47/01 (PDF) - English

 

Note: The latest position of unsettled appeals is shown in either (a) Table of Appeals to Court of First Instance or (b) Table of Appeals to Court of Appeal/Court of Final Appeal. When the final outcome of an appeal is known, the position is set out in either table and will disappear in the next issue of Board of Review Decisions.

To view "Table of Appeals to Court of First Instance/Court of Appeal/Court of Final Appeal" (position as at 30.11.2001), please click here.

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