Decision No
 

PENALTY TAX -
 

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')
 

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

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')
 

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')
 

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')
 

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

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
 

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')
 

property resold within short time - whether trade
 

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')
 

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')
 

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
 

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
 

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')
 

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')
 

properties - whether for redevelopment
 

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

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
 

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')
 

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

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')
 

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')
 

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')
 

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')
 

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