Mourtaza A. Tadjee v. Commissioner-General of Income Tax, Misc. Civ. App., 1-Tanga-1971, 16/5/1972, Bramble, J.

Mourtaza A. Tadjee v. Commissioner-General of Income Tax, Misc. Civ. App., 1-Tanga-1971, 16/5/1972, Bramble, J.

This is an appeal against a Confirming Notice whereby the Commissioner-General of Income Tax has refused to amend an assessment made in respect of appellant’s income tax for the year 1967. The brief facts are that the appellant’s father used to carry on the Ngamiani Petrol Station at Tanga. In 1962 he transferred the business with all assets and liabilities to the appellant in consideration of natural love and affection. In 1967 the sum of Shs. 47,228/10 was received b the Petrol Station from Tanganyika Shell Ltd. in respect of discounts which had been withheld over a number of years. Of this sum Shs. 20,590/= was for a period ending on 30^th June, 1961; Shs. 23,187/90 for 1962 to 1966 and Shs. 4,450/10 for 1967. The appellant’s father died in 1967 and at the time was indebted to the Petrol Station in the sum of Shs. 15,286/71, which he had obtained as a friendly loan. The Court has been asked to determine the following issued:-

(a) Whether a lump sum received in one years could be spread over previous years i.e. whether the receipt of Shs. 22,187/90 by the appellant from Shell (Tanzania) Ltd. is taxable as income tax for 1967 as income for the years 1962 to 1966 in accordance with section 4 (c) of the East African Income Tax Management Act:- (b) Whether the receipt of Shs. 20,590/= is taxable as income received by the appellant or as income of the previous owner; (c) Whether the total amount outstanding in the father’s account i.e. Shs. 15,284/71, should be set off against a credit of Shs. 20,590/=.

            Held: (1) “As to the first issue the appellant relied on the Proviso to Section 4 (e) of the relevant Act ….. Assuming that the money received by the appellant came within the provisions of the Section the question of division of the sum in equal portions and spreading back over the years is a matter in the discretion of the Commissioner-General and this must be invoked by a request in writing by the tax –payer. No such request was made but the tax-payer’s accountant made the decision of his own accord and made revised returns. With particular reference to the sum of Shs. 22,197/90 this was released in 1967 and although it was money retained during the year 1962 to 19666 it became income for 1967, the year in which it was released. Sine it has not been shown that the discretion of the Commissioner-General was requested or that he exercised his discretion wrongly it cannot be said that the assessment for 1967, which considered that money as income, was excessive.’ (2) “As to the sum of Shs. 20,590/= paid for the period ending 30^th June, 1961 this represented a debt due to the Ngamiani Service Station. It was admitted that when the Service Station was transferred withal the assets and liabilities the previous owner would have no claim on these assets. At the time of the transfer there were other debts outstanding and it has not been suggested that the provision owner could claim them when they were paid to the present owner. There is not any difference between those debts which, when paid became real assets of he present proprietor. I hold, therefore, that the Shs. 20,590/= is taxable as income of the appellant and for the reasons advanced in the last paragraph it was income for 1967. Since this was not the income of the former proprietor it could not be credited to his account to affect a debt of Shs. 15,286/71. Even if this could be done this latter amount would still be income of the appellant for 1967 and would not fall within section 4 (e) of the Act in order to warrant a request for spreading over.” (3) Appeal dismissed with costs.