COMMISSIONER OF INLAND REVENUE v. SO CHAK KWONG, JACK

HCIA000002/1986

IN THE SUPPREME COURT OF HONG KONG

HIGH COURT

INLAND REVENUE APPEAL NO. 2 OF 1986

BETWEEN

COMMISSIONER OF INLAND REVENUE

Appellant
v
SO CHAK KWONG, JACK Respondent

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Coram: Mortimer J.

Date of hearing: 15th October, 1936.

Date of judgments: 15th Octobers, 1986.

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JUDGMENT

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1. In this matter the Commissioner of Inland Revenue appeals by way of case stated on points of law from the Board of Review.

2. The questions of law for the opinion of the Court are:

a) Was the Board of Review correct in holding that the words “visits not exceeding a total of 60 days” in Section 6(1D)of the Inland Revenue Ordinances, Cap. 112 refer only to days spent rendering services in Hong Kong?

b) Was the Board of Review correct in holding that the taxpayer is entitled to the benefit of Section 8(1B) of the Ordinance?

3. It is conceded by the taxpayer that his salary for the relevant year of assessment arose in or was derived from Hong Kong from anoffice or employment of profit in accordance with Section 8(1B) of the Ordinance. He contends however that his income is to be excludedfrom assessment because all the services in connection with his employment were rendered outside Hong Kong. (Section 8(1A)(b).)

4. On a number of occasions to came to Hong Kong in connection with his employment and he tools the opportunity of spending additionaltime here with his family. During the relevant time he spent 108 days in Hong Kong. 28 of those were spent rendering services inconnection with his employment, the remainder he spent here either on home leave or casual leave.

5. Following the Taxpayers’ contentions the Beard of Review found that in deciding whether all services in connection with his employmentwere rendered outside Hong Kong no account should be taken of those services rendered during the 28 days because he was protectedby the provisions of Section 8(1B) as the 60 days total related only to days when services were actually rendered.

6. Section 8(1B) of the Ordinance reads

“in determining whether or not all services are rendered outside Hong Kong for the purposes of Sub-Section (1A) no account shall betaken of services rendered in Hong Kong during visits not exceeding a total of 60 days in the basis period for the year of assessment.”

7. The Board of Review was pursuaded that Section 8(1B) was ambiguous and capable of two interpretations. I disagree. In this regardthis Sect on is clear and unambiguous. The words “not exceeding a total of 60 days” qualify the word “visits” and net the words “servicesrendered”. Were it otherwise the Section would be expressed differently. In order to take the benefit of the Section therefore aTaxpayer must not render services during visits which exceed a total of 60 days in the relevant period.

8. It follows that in the opinion of this Court each of the questions of law posed in the case stated is to be answered in the negative.

9. In pursuance of my powers under Section 69(5) of the Ordinance I remit this case to the Beard of Review with the above opinion forthe Board to revise the assessment as this opinion may require.

10. Mr. WINGFIBLD for the Commissioner informed me that he did not seek the costs of the appeal against the Taxpayer and accordinglythere is no order for costs.

( J. B. Mortimer )

Judge of the High Court

Representation:

I. wingfield, Crown Solicitor for the Appellant

Respondent absent