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[CONSOLIDATED APPEAL]
MAI SUNDU
V.
COMMISSIONER OF INCOME TAX
THE WEST AFRICAN COURT OF APPEAL, HOLDEN AT FREETOWN, SIERRA LEONE
7TH DAY OF FEBRUARY, 1955
W.A.C.A. NO. 24/1954 and W.A.C.A NO. 26/1954
2PLR/1952/88 (WACA)
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OTHER CITATION(S)
2PLR/1952/88 (WACA)
(1955) XIV WACA PP. 656-658
LEX (1955) – XIV WACA 656-658
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BEFORE THEIR LORDSHIPS:
FOSTER-SUTTON, P.
SMITH, C.J., SIERRA LEONE
COUSSEY, J.A.
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BETWEEN:
MAI SUNDU – Appellant
AND
COMMISSIONER OF INCOME TAX – Respondent
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ORIGINATING COURT(S)
APPEAL:- Appeal by taxpayer and cross-appeal by Commissioner of Income Tax from the decision of the Supreme Court in the taxpayer’s appeal against assessment
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REPRESENTATION
B. Tejansie — for the Appellant
M. C. Marke — for the Commissioner of Income Tax
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ISSUE(S) FROM THE CAUSE(S) OF ACTION
TAXATION AND REVENUE LAW:- Income Tax Ordinance — Section 57(4) — Appeal against assessment — Onus on appellant to prove it is excessive — Relevant considerations
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CASE SUMMARY
Section 57(4) of the Ordinance provides that the onus of proving that the assessment complained of is excessive shall be on the appellant.
The above appellant appealed to the Supreme Court; he failed in part and appealed to the Court of Appeal complaining that the figure allowed him for liabilities ought to be much more. He submitted a far higher figure than he had stated in his income tax return and explained that the difference was partly due to money put in by his brothers and more so to moneys left in his custody by persons in his employ. He called his brothers but none of his employees; he did not produce any books or documents to support his testimony. His other complaint was that the Judge had put too high a value on certain premises: (he was partly right; the Judge had misunderstood the evidence).
The Commissioner cross-appealed against reductions allowed by the Judge in the value of (a) furniture and fittings, and (b) stock in trade.
As regards (a): The taxpayer gave a low figure in his return, which he nearly doubled on oath in Court. The Judge accepted his evidence and reduced the higher figure of the Commissioner on the ground that there was other evidence to the contrary.
As regards (b) the stock in trade: The appellant stated a figure in his affidavit but reduced it in his oral evidence without being able to explain why. He testified that he kept an account book of purchases and daily sales and asked for an adjournment to produce it, which the Judge refused. The Judge accepted the figure in the affidavit, which was lower than the figure assessed by the Commissioner.
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DECISION(S) OF THE WEST AFRICAN COURT OF APPEAL
Held that:
(1) On the taxpayer’s appeal: the appellant had not proved that the figure of liabilities adopted by the Commissioner was wrong, and the Judge was right in accepting it; but the evidence on the value of certain premises had been misunderstood by the Judge and the relevant figure would be reduced accordingly.
(2) On the Commissioner’s cross-appeal:-
(a) The Judge erred in disturbing the figure of the Commissioner for furniture and fittings by accepting what the appellant said in evidence: for the appellant had tried to deceive the Court in every aspect of the case and there was no evidence, documentary or other, to support the appellant;
(b) In regard to the stock in trade, the appellant had failed to discharge the onus cast on him to prove that the Commissioner’s figure was too high: for on the one hand he could not explain why in oral evidence he reduced the value he had put in his affidavit, and on the other he produced no book of account: the refusal to allow him an adjournment with a view to his producing such a book was right as the appellant had had notice of the day fixed for hearing and known from the Commissioner’s reply to the grounds of appeal the case he would have to refute.
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MAIN JUDGMENT
The following judgment was delivered:
FOSTER-SUTTON, P.
This was an appeal from a decision of Luke, J., given in an appeal by the present appellant against an assessment of income tax made upon him by the respondent, Commissioner of Income Tax, for the years of assessment 1951-52, 1952-53 and 1953-54; and there was a cross-appeal by the respondent in respect of the reduction in value of two items assessed by him.
Mr. Tejansie, who appeared for the appellant, complained that the learned trial Judge had failed to allow enough deduction for “Liabilities”, and had placed too high a value on premises at Koidu, Woama, Kainkordu, Timbudu and Bumbe in arriving at his assessment of the appellant’s “Total Worth as at 31st March, 1953”; and Mr. M. C. Marke, for the respondent, submitted that the trial Judge had erred in reducing the Commissioner’s assessments of the value of (a) the appellant’s refrigerator, fittings and furniture and (b) his stock in trade, from £600 to £390 and £14,000 to £6,441, respectively.
The appellant claimed that the deduction in respect of his liabilities should have been £4,444 16s. 2d., but in the income tax return he submitted for the year ending 31st March, 1953, he stated that the amount due by him to “Creditors” was £1,423 I 1s. 5d. In his affidavit sworn on 22nd June, 1954, the appellant sought to explain the discrepancy by saying, “I failed to take account of moneys contributed into the business by many of my relatives”, and when he gave evidence he alleged that he and his brothers inherited £250, and fifteen cows from their father which they sold “and realised £700″, all of which they placed in the business. He also testified that” boys working in the mines started giving me moneys for safe-keeping. These moneys were put into the business”. In support of these allegations he called two of his brothers as witnesses who gave evidence that they had all inherited the sum of £250, and fifteen cows, from their father, that the cows were sold for £450, making a total of £700, which was put into the business. None of “the boys working in the mines” were called, and no books or other documents were produced in support of the testimony. It does not, therefore, occasion me any surprise that the trial Judge preferred to accept the Commissioner’s round figure of £1,500, supported, as it was, by the figures given by the appellant in his last income tax return. In this connection it is also relevant to observe that in his returns for the years ending 31st March, 1951, and 31st March, 1952, he gave the amounts owing to his creditors as £1,061 13s. 10d. and £713 14s. 5d. respectively.
Regarding the premises at Koidu, in his affidavit of 22nd June, 1954, the appellant gave their value as £1,000, but in his evidence he gave their value as £2,230. The learned trial Judge when dealing with these premises said, “Appellant’s evidence gave figures for these premises which amounted to £3,520 although under cross-examination he was unable to give accurate details and supporting vouchers. I shall accept that figure as it is more than appellant had disclosed in his affidavit sworn on 22nd June, 1954”. The Commissioner did not suggest that the appellant owned more than three premises at Koidu, and it is clear from the note of his final address in the Court below that he understood the appellant’s evidence to be, as I do, that the three premises had cost him a total of £2,230.
We did not ask the respondent’s counsel to address us on the point, but since it seems clear that the learned trial Judge misinterpreted the evidence on the matter, although his reason for amending the Commissioner’s assessment of their value does not commend itself to me, as there is no cross-appeal regarding the item, I would amend item (i) in the penultimate paragraph of the judgment to read ” (i) Premises at Koidu £2,230″.
In his affidavit of 22nd June, 1954, the appellant gave the value of his premises at “Woama, Kainkordu, Tombodu and Bumbe” as £2,315. The learned trial Judge accepted this figure, and I do not think there is any merit in the appellant’s complaint that it is too high.
Regarding counsel for the respondent’s submission that the learned trial Judge erred in reducing the Commissioner’s assessments of the value of the appellant’s refrigerator, furniture and fittings and stock in trade.
The appellant’s affidavit of 22nd June, 1954, gives the value of his refrigerator, furniture and fittings as £207 12s. 0d. When he gave evidence on oath in the Court below he gave their value as £390. The trial Judge accepted the latter figure “in the absence of any other evidence to the contrary”, but in the light of the appellant’s obvious attempts to deceive the Court on every aspect of his case, and his failure to produce any documentary or other evidence in support of his contention, I am of the opinion that the Commissioner’s assessment of £600 ought not to have been amended. I would, therefore allow the cross-appeal as to this item and amend item (iii) in the judgment to read “(iii) Refrigerator, furniture and fittings £600′”.
The estimated value of the appellant’s stock in trade is given in his affidavit as £6,441. In his evidence he changed this figure to £4,898. The learned trial Judge when commenting on the matter in his judgment said; “When asked under cross-examination to explain the difference between the two figures the witness couldn’t. In view of that I accept the figure of £6.441, and he reduced the Commissioner’s assessment of £14,000, accordingly.
Respondent’s counsel submitted that there was no evidence to justify the acceptance of the figures given by the appellant, and I agree with this contention. The appellant gave evidence on oath that he enters in his account book all his purchases and daily sales, but no account book was produced. It is the case that in the Court below his counsel asked for an adjournment of “about three days” in order to enable him to produce books, but the application was made after the appellant had given his evidence in chief, been cross-examined, and his counsel had intimated that he did not wish to re-examine him. There was ample notice given of the date of the hearing in the Court below, and if the books did exist, were genuine, and supported the appellant’s evidence, one would have expected him to have them available to put into evidence when he first made his appearance in the witness box. He could not plead that he was taken by surprise because the case he would have to refute was fully set out in the Commissioner’s reply to the grounds of appeal, dated 24th March, 1954, which the appellant replied to by his affidavit dated 22nd June, 1954. In the circumstances I am of the opinion that the trial Judge rightly refused the application for an adjournment.
The onus of proving that an assessment is excessive was upon the appellant: section 57(4) of the Income Tax Ordinance; and in my view he signally failed to discharge it in so far as the Commissioner’s assessment of the value of his stock in trade was concerned. That being so I would also amend item number (iv) in the penultimate paragraph of the judgment to read “(iv) Stock in trade £14,000”.
The three amendments allowed require consequential amendments to the additions, and the present figure of “Total gain £15,476″, is amended to read “Total gain £21,955”.
The respondent having substantially succeeded on this appeal I would award him costs, to be taxed, against the appellant.
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SMITH, C. J.
I concur.
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COUSSEY, J. A.
I concur.
Appeal partly allowed; cross-appeal allowed; judgment varied.
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