FEDERAL BOARD OF INLAND REVENUE V. NASR

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FED. BOARD OF INLAND REVENUE V. NASR

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303

FED. BOARD OF INLAND REVENUE V. NASR

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FEDERAL BOARD OF INLAND REVENUE

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APPELLANT/RESPONDENT

V

10 DIAB A. NASR

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RESPONDENT/APPELLANT

SUIT NO. SC 205/1964

SUPREME COURT OF NIGERIA

BRETT,

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J.S.C.

ONYEAMA,

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J.S.C.

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AJEGBO,

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J.S.C.

23rd December, 1964

Legislation - Companies Income Tax Act, 1961, s.57(7) - High Court of Lagos

(Income Tax appeals) Rules, 1957 (in 1958 Laws of the Federation, vol. VIII).

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R.15(2) - Income Tax Act (cap.85 in 1958 Laws of the Federation), s.18(3)(a)

- Income Tax Management Act, 1961, s.20(5), and Second Schedule, para.1(ii)

Appeals - Income Tax - Onus of proof on tax payer - Opportunity of calling

evidence, vel non - Assessable income - Income from employment - Income

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from rents - Taxpayer making a deed of gift of house.

ISSUES:

1. On whom lies the onus of proving that an assessment by the Federal Board of

Inland Revenue is excessive.

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2. Whether the rents accruing from a house which a tax

payer has conveyed by deed of gift, are part of his assessable income under

par. 1 (ii) of the second schedule of the Income Tax Management Act. 1961.

FACTS:

The Board assessed the tax payer for the years 1960/61 and 1961/62; the Ap-

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peal Commissioner substituted other assessments. The High Court set aside all

assessments and referred the matter back to the Board with directions. Both sides

appealed. The High Court held that the tax payer made a valid deed of gift in 1959

conveying a house to himself and other members of his family as tenants in com-

mon. The rents were said to have formed most of his income. The Board argued

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that the entire rents must be deemed to be the tax payer's income by virtue of

para.1(ii) of the Second Schedule to the Income Tax Management Act, 1961. The

Appeal Commissioners included in the assessable income for 1961/62 a sum of

£500 received by the tax payer as Director's fees during 1960/61. The Board sub-

mitted that the £500 could be included in the assessable income for 1960/61 under

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s.18(3)(a) of the Income Tax Act (repealed) if the £500 was a new source of in-

come.

HELD:

1.

The tax-payer has the onus to 'show by evidence both that the assessment is

excessive and by how much it is excessive.

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2. (1) The provisions of paragraph 1 (iii) of the Second Schedule to the Income

Tax Management Act only apply if the instrument creating the settlement or

trust expressly permits the senior or other person to make use of the income,

and it is not enough for the Board to show that he has in fact done so; but