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Volume 16 Third Supplement

Publication Date: Jul 2002

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DIGEST OF CASES REPORTED

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  Decision No. Download
PENALTY TAX    

incorrect salaries tax return - failure to disclose commission from other companies - whether reasonable excuse - ss 51(2) and 82A of the Inland Revenue Ordinance ('IRO') - personal obligation - whether quantum of additional tax excessive  

D103/01 Download D103/01 (DOC) - English Download D103/01 (PDF) - English

incorrect tax returns - whether reasonable excuse - quantum - mitigation - co-operation  

D90/01 Download D90/01 (DOC) - English Download D90/01 (PDF) - English

submission of incorrect tax returns without reasonable excuse - imposition of additional assessments at the average rate of 52.6% - standard practice was to use as a starting point penalty equivalent to 100% of the tax underpaid - ss 82A and 82B of the Inland Revenue Ordinance ('IRO')  

D131/01 Download D131/01 (DOC) - English Download D131/01 (PDF) - English

tax return - omit to report inocme from sale commissions - appellant dishonest - additional tax levied at 100% of the tax undercharged - ss 51(2), 68(8), 82A and 82B of the Inland Revenue Ordinance ('IRO')  

D110/01 Download D110/01 (DOC) - English Download D110/01 (PDF) - English
PERSONAL ASSESSMENT    

whether loss sustained from failure to complete the purchase of a property a trading loss - ss 2, 14(1), 42(2)(b) and 68(4) of the Inland Revenue Ordinance ('IRO')  

D117/01 Download D117/01 (DOC) - English Download D117/01 (PDF) - English
PROFITS TAX    

deduction for mortgage interest - s 42(1) of the Inland Revenue Ordinance ('IRO') - onus of proof - effect of self-serving assertions un-tested by cross examination  

D96/01 Download D96/01 (DOC) - English Download D96/01 (PDF) - English

disposal of properties - whether profits derived from the sale of the property assessable to profits tax - intention at the time of acquisition - whether quick disposition is inconsistent with the long term investment intention - onus of proof  

D97/01 Download D97/01 (DOC) - English Download D97/01 (PDF) - English

properties transferred between closely related companies - whether properties held as agent or on long term basis  

D92/01 Download D92/01 (DOC) - English Download D92/01 (PDF) - English

property - whether investment or trade  

D91/01 Download D91/01 (DOC) - English Download D91/01 (PDF) - English

real property - whether the gains arising from the disposal of properties were liable for profits tax - whether expenses should be allowed - ss 2, 14(1), 61, 66(3) and 68(4) of the Inland Revenue Ordinance ('IRO') - costs - frivolous and vexatious and abuse of the process - s 68(9) of the IRO  

D112/01 Download D112/01 (DOC) - English Download D112/01 (PDF) - English

whether certain sum could be deducted as 'expense' - onus of proof on appeal rests on the appellant - interposition of different companies and the appellant - the test to be applied - identify any commercial realism between different companies - whether the impugned transaction was 'unrealistic from a business point of view' or 'commercially unrealistic' - any comtemporaneous document in support - whether precluded by the Personal Data (Privacy) Ordinance (Chapter 486) ('PD(P)O') from disclosing details of appellant's client(s) - wholly unmeritorious appeal - penalized in costs - s 58(1)(c) and (2) and principle 3 of the PD(P)O - ss 61, 68(4) and 68(9) of the Inland Revenue Ordinance ('IRO')  

D129/01 Download D129/01 (DOC) - English Download D129/01 (PDF) - English

whether certain sums were deductible as outgoings and expenses - two criteria to be satisfied before deduction is allowed under s 16(1) - firstly, it must be incurred in the production of assessable profits and secondly, it must be incurred during the basis period for the relevant year of assessment - mere compliance with s 16(1) is not sufficient, it must also not be excluded under s 17(1) - ss 16, 17 and 68(4) of the Inland Revenue Ordinance ('IRO')  

D128/01 Download D128/01 (DOC) - English Download D128/01 (PDF) - English

whether fines can be deducted as outgoings and expenses under s 16 of the Inland Revenue Ordinance ('IRO') - whether the taxpayer requires to show that an item of expenditure or outgoing is 'necessarily' incurred  

D99/01 Download D99/01 (DOC) - English Download D99/01 (PDF) - English

whether the sale of a property was trading in nature - the circumstances and facts of the case go against the contention of the taxpayer - absence of explanation as to the nature of money deposited into the bank accounts of the taxpayer - the failure of the taxpayer to give evidence on appeal - burden of proof on the taxpayer - appeal was unmeritorious and frivolous - penalized in costs - ss 2(1), 14 and 68(4) of the Inland Revenue Ordinance ('IRO')  

D127/01 Download D127/01 (DOC) - English Download D127/01 (PDF) - English

whether the sale was trading activity - intention - whether profits assessable to tax - whether the properties are capital assets  

D104/01 Download D104/01 (DOC) - English Download D104/01 (PDF) - English
SALARIES TAX    

failure to report gain under share option scheme due to an 'oversight' - additional tax levied at 9.72% of the originally understated and undercharged tax - s 82A of the Inland Revenue Ordinance ('IRO')  

D115/01 Download D115/01 (DOC) - English Download D115/01 (PDF) - English

home loan interest deduction - property - joint tenant becoming sole owner - when entitled to claim full deduction - s 26E of the Inland Revenue Ordinance ('IRO')  

D94/01 Download D94/01 (DOC) - English Download D94/01 (PDF) - English

housing allowance - whether income or rent refunds  

D93/01 Download D93/01 (DOC) - English Download D93/01 (PDF) - English

income accrued was income of a firm - s 68(4) of the Inland Revenue Ordinance ('IRO')  

D118/01 Download D118/01 (DOC) - English Download D118/01 (PDF) - English

income under agreements - whether income derived from an employment of profit - ss 8, 9A and 68(4) of the Inland Revenue Ordinance ('IRO')  

D108/01 Download D108/01 (DOC) - English Download D108/01 (PDF) - English

non-attendance at hearing - s 68(2D) and 68(2B) of the Inland Revenue Ordinance ('IRO') - employment - source of income - s 68(4) of the IRO - whether liable to salaries tax - onus of proof  

D101/01 Download D101/01 (DOC) - English Download D101/01 (PDF) - English

whether assessments excessive. [Decision in Chinese]  

D132/01 Download D132/01 (DOC) - Traditional Chinese Download D132/01 (PDF) - Traditional Chinese

whether certain amount was 'employment income' - interposition of different companies and the appellant - onus of proof on appeal rests on the appellant - the test to be applied - identify any commercial realism between different companies - whether the impugned transaction was 'unrealistic from a business point of view' or 'commercially unrealistic' - whether the sole or dominant purpose of effecting the interposition was to enable the appellant to obtain a tax benefit - wholly unmeritorious appeal - penalized in costs - ss 9A, 12(1)(a), 17(1)(a), 61, 61A, 68(4) and 68(9) of the Inland Revenue Ordinance ('IRO')  

D130/01 Download D130/01 (DOC) - English Download D130/01 (PDF) - English

whether certain amounts of a loan fall within 'home loan' definition of s 26E of the Inland Revenue Ordinance ('IRO') - 'home loan interest' concession - the meaning of the word 'acquisition' under s 26E(9) of the IRO - ss 26E and 68(4) of the IRO  

D123/01 Download D123/01 (DOC) - English Download D123/01 (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 31.5.2002), please click here.

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