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Volume 17

Publication Date: Oct 2002

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DIGEST OF CASES REPORTED

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  Decision No. Download
PENALTY TAX    

failing to report income fully - whether reasonable excuse - financial difficulty  

D158/01 Download D158/01 (DOC) - English Download D158/01 (PDF) - English

late filing of returns - ss 51(1) and 82A of the Inland Revenue Ordinance ('IRO') - whether persistent failure to submit return on time should be regarded as a specie of tax evasion - whether cavalier attitude of the appellant in delaying to submit accounts aggravated the default  

D149/01 Download D149/01 (DOC) - English Download D149/01 (PDF) - English

submission of incorrect tax returns without reasonable excuse - imposition of additional tax assessments at the average rate of 7% per annum compound on the amounts of tax undercharged for the delay - whether taxpayer agreed to face additional or penalty tax is irrelevant under s 82A - appeal was frivolous and vexatious and an abuse of the process - penalize in costs - ss 68(4), 68(9), 70, 82A and 82B of the Inland Revenue Ordinance ('IRO')  

D143/01 Download D143/01 (DOC) - English Download D143/01 (PDF) - English

submission of incorrect tax returns without reasonable excuse - imposition of additional tax assessments in a sum equivalent to 10% of tax undercharged - the Commissioner was entitled to impose additional tax but had not placed sufficient weight on the appellant's track record  

D150/01 Download D150/01 (DOC) - English Download D150/01 (PDF) - English
PROFITS TAX    

manufacturing business both in Hong Kong and Mainland China - whether tooling income and interest ncome part and partial to the manufacturing process - apportionment of profits - Departmental Interpretation and Practice Notes No 21 ('DIPN 21')  

D163/01 Download D163/01 (DOC) - English Download D163/01 (PDF) - English

property - investment or trade  

D157/01 Download D157/01 (DOC) - English Download D157/01 (PDF) - English

sale of property - intention at the time of acquisition - whether the acquisition of the said property was for the rental yields from the tenancy - whether the acquisition of the said property was to make provision on retirement of shareholder - whether successive sales of the said property indicative of trading intention - whether disposal of the said property within one month of purchase was consistent with an intention to hold the said property on a long-term basis - s 68(4) of the Inland Revenue Ordinance ('IRO') - onus of proof on the appellant  

D147/01 Download D147/01 (DOC) - English Download D147/01 (PDF) - English

source of income - securities trades  

D152/01 Download D152/01 (DOC) - English Download D152/01 (PDF) - English

whether certain sums were deductible - onus of proof on the taxpayer that an expense was incurred for the production of his assessable profits - purpose of payments - whether the expense was bona fide incurred in the production of the chargeable profits - matter of fact and degree - whether a relevant transaction between the taxpayer and a service company was artificial within the ambit of s 61 - whether the sole and dominant purpose of enabling the taxpayer to obtain a tax benefit - ss 16, 17, 61, 61A and 68(4) of the Inland Revenue Ordinance ('IRO')  

D153/01 Download D153/01 (DOC) - English Download D153/01 (PDF) - English

whether the sale of a property was trading in nature - depend on the intention at the time of purchase - necessary to consider all relevant objective factors - economic strength - the span of time in holding the property - reason for sale - number of property being held at any one time - the circumstances and facts of the case go against the contention of the appellant - conflicting explanations given by the appellant - display of dishonesty and lack of integrity - the appellant's allegation was misleading - no evidence could be placed before the Board to substantiate her contention - burden of proof on the appellant - ss 2(1), 14(1) and 68(4) of the Inland Revenue Ordinance ('IRO'). [Decision in Chinese]  

D145/01 Download D145/01 (DOC) - Traditional Chinese Download D145/01 (PDF) - Traditional Chinese

whether there was basis for re-opening the assessment of profits tax made more than a year - taxpayers are bound by the approach adopted in their submitted financial statements to the Inland Revenue Department ('IRD') - definition of 'mistake, errors or omissions' - sudden change of the case before the Board - proper explanation or supporting evidence is required - ss 70 and 70A of the Inland Revenue Ordinance ('IRO')  

D142/01 Download D142/01 (DOC) - English Download D142/01 (PDF) - English
PROPERTY TAX    

whether tenancy of a property ceased to operate during part of the years of assessment - definition of the word 'payable' - surrender, cancellation or suspension of tenancy by conduct - fact of life was not the precise legal basis - ss 5(1), 5B, 7C and 68(4) of the Inland Revenue Ordinance ('IRO')  

D151/01 Download D151/01 (DOC) - English Download D151/01 (PDF) - English
SALARIES TAX    

dependent parent allowance - disabled dependant allowance - disability certified by the Pneumoconiosis Medical Board - ss 30(1), 31A and 68(4) of the Inland Revenue Ordinance ('IRO') - ss 15B(1)(a) and 27 of the Pneumoconiosis (Compensation) Ordinance ('P(C)O')  

D137/01 Download D137/01 (DOC) - English Download D137/01 (PDF) - English

employment - source of income - s 8(1), 8(1A) and 8(1B) of the Inland Revenue Ordinance ('IRO')  

D138/01 Download D138/01 (DOC) - English Download D138/01 (PDF) - English

home loan interest - whether interest on loan utilised to pay premium for the purpose of removing the restriction on alienation entitled to deduction - s 26E of the Inland Revenue Ordinance ('IRO') - Housing Ordinance ('HO')  

D139/01 Download D139/01 (DOC) - English Download D139/01 (PDF) - English

housing allowance - whether remuneration  

D156/01 Download D156/01 (DOC) - English Download D156/01 (PDF) - English

married person's allowance - when marriage becoming effective - s 2(1) of the Inland Revenue Ordinance ('IRO')  

D161/01 Download D161/01 (DOC) - English Download D161/01 (PDF) - English

single parent allowance - sole or predominant care of the child - 'care' is not necessarily the same as 'custody' - s 32(1), (2) and (3) of the Inland Revenue Ordinance ('IRO') - s 19 of the Matrimonial Proceedings and Property Ordinance  

D140/01 Download D140/01 (DOC) - English Download D140/01 (PDF) - English

source of income - Chinese income tax paid - ss 8(1), (1A), (1B) and 68(4) of the Inland Revenue Ordinance ('IRO'). [Decision in Chinese]  

D141/01 Download D141/01 (DOC) - Traditional Chinese Download D141/01 (PDF) - Traditional Chinese

whether employment - whether transaction for obtaining tax benefit - s 61A of the Inland Revenue Ordinance ('IRO')  

D155/01 Download D155/01 (DOC) - English Download D155/01 (PDF) - English

whether gratuity was chargeable to salaries tax - whether long service payment chargeable to salaries tax - ss 9(1)(a) and 11D(b) of the Inland Revenue Ordinance ('IRO') - whether such lump sum was a compensation for the lost of job - whether such lump sum was a provision of 'sweetener' for early retirement. [Decision in Chinese]  

D133/01 Download D133/01 (DOC) - Traditional Chinese Download D133/01 (PDF) - Traditional Chinese

whether housing allowance was chargeable to tax - whether housing allowance was paid as rental refund - intention at the time of entering into the contract of employment - control test to screen out the colourable scheme to save tax - s 9(2) of the Inland Revenue Ordinance ('IRO')  

D144/01 Download D144/01 (DOC) - English Download D144/01 (PDF) - English

whether reasonable excuse preventing the appellant from lodging a valid appeal within one-month period - s 66(1A) of the Inland Revenue Ordinance ('IRO')  

D146/01 Download D146/01 (DOC) - English Download D146/01 (PDF) - English

whether services rendered outside Hong Kong - s 8(1), (1A) and (1B) of the Inland Revenue Ordinance ('IRO')  

D162/01 Download D162/01 (DOC) - English Download D162/01 (PDF) - English

whether the service agreement was a scheme entered into to enable the appellant to obtain tax benefit - whether the service agreement was a form of disguised employment - ss 12(1)(a), 16(1), 61A(2) and 68 of the Inland Revenue Ordinance ('IRO') - onus of proof - frivolous and vexatious appeal - order to pay costs  

D154/01 Download D154/01 (DOC) - English Download D154/01 (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 31.8.2002), please click here.

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