Decision No
 

PENALTY TAX -
 

incorrect tax returns - whether reasonable excuse - quantum - mitigation - co-operation
 

incorrect salaries tax return - failure to disclose commission from other companies - whether reasonable excuse - ss 51(2) and 82A of the Inland Revenue Ordinance ('IRO') - personal obligation - whether quantum of additional tax excessive
 

tax return - omit to report inocme from sale commissions - appellant dishonest - additional tax levied at 100% of the tax undercharged - ss 51(2), 68(8), 82A and 82B of the Inland Revenue Ordinance ('IRO')
 

submission of incorrect tax returns without reasonable excuse - imposition of additional assessments at the average rate of 52.6% - standard practice was to use as a starting point penalty equivalent to 100% of the tax underpaid - ss 82A and 82B of the Inland Revenue Ordinance ('IRO')
 

whether loss sustained from failure to complete the purchase of a property a trading loss - ss 2, 14(1), 42(2)(b) and 68(4) of the Inland Revenue Ordinance ('IRO')
 

property - whether investment or trade
 

properties transferred between closely related companies - whether properties held as agent or on long term basis
 

deduction for mortgage interest - s 42(1) of the Inland Revenue Ordinance ('IRO') - onus of proof - effect of self-serving assertions un-tested by cross examination
 

disposal of properties - whether profits derived from the sale of the property assessable to profits tax - intention at the time of acquisition - whether quick disposition is inconsistent with the long term investment intention - onus of proof
 

whether fines can be deducted as outgoings and expenses under s 16 of the Inland Revenue Ordinance ('IRO') - whether the taxpayer requires to show that an item of expenditure or outgoing is 'necessarily' incurred
 

whether the sale was trading activity - intention - whether profits assessable to tax - whether the properties are capital assets
 

real property - whether the gains arising from the disposal of properties were liable for profits tax - whether expenses should be allowed - ss 2, 14(1), 61, 66(3) and 68(4) of the Inland Revenue Ordinance ('IRO') - costs - frivolous and vexatious and abuse of the process - s 68(9) of the IRO
 

whether the sale of a property was trading in nature - the circumstances and facts of the case go against the contention of the taxpayer - absence of explanation as to the nature of money deposited into the bank accounts of the taxpayer - the failure of the taxpayer to give evidence on appeal - burden of proof on the taxpayer - appeal was unmeritorious and frivolous - penalized in costs - ss 2(1), 14 and 68(4) of the Inland Revenue Ordinance ('IRO')
 

whether certain sums were deductible as outgoings and expenses - two criteria to be satisfied before deduction is allowed under s 16(1) - firstly, it must be incurred in the production of assessable profits and secondly, it must be incurred during the basis period for the relevant year of assessment - mere compliance with s 16(1) is not sufficient, it must also not be excluded under s 17(1) - ss 16, 17 and 68(4) of the Inland Revenue Ordinance ('IRO')
 

whether certain sum could be deducted as 'expense' - onus of proof on appeal rests on the appellant - interposition of different companies and the appellant - the test to be applied - identify any commercial realism between different companies - whether the impugned transaction was 'unrealistic from a business point of view' or 'commercially unrealistic' - any comtemporaneous document in support - whether precluded by the Personal Data (Privacy) Ordinance (Chapter 486) ('PD(P)O') from disclosing details of appellant's client(s) - wholly unmeritorious appeal - penalized in costs - s 58(1)(c) and (2) and principle 3 of the PD(P)O - ss 61, 68(4) and 68(9) of the Inland Revenue Ordinance ('IRO')
 

housing allowance - whether income or rent refunds
 

home loan interest deduction - property - joint tenant becoming sole owner - when entitled to claim full deduction - s 26E of the Inland Revenue Ordinance ('IRO')
 

non-attendance at hearing - s 68(2D) and 68(2B) of the Inland Revenue Ordinance ('IRO') - employment - source of income - s 68(4) of the IRO - whether liable to salaries tax - onus of proof
 

income under agreements - whether income derived from an employment of profit - ss 8, 9A and 68(4) of the Inland Revenue Ordinance ('IRO')
 

failure to report gain under share option scheme due to an 'oversight' - additional tax levied at 9.72% of the originally understated and undercharged tax - s 82A of the Inland Revenue Ordinance ('IRO')
 

income accrued was income of a firm - s 68(4) of the Inland Revenue Ordinance ('IRO')
 

whether certain amounts of a loan fall within 'home loan' definition of s 26E of the Inland Revenue Ordinance ('IRO') - 'home loan interest' concession - the meaning of the word 'acquisition' under s 26E(9) of the IRO - ss 26E and 68(4) of the IRO
 

whether certain amount was 'employment income' - interposition of different companies and the appellant - onus of proof on appeal rests on the appellant - the test to be applied - identify any commercial realism between different companies - whether the impugned transaction was 'unrealistic from a business point of view' or 'commercially unrealistic' - whether the sole or dominant purpose of effecting the interposition was to enable the appellant to obtain a tax benefit - wholly unmeritorious appeal - penalized in costs - ss 9A, 12(1)(a), 17(1)(a), 61, 61A, 68(4) and 68(9) of the Inland Revenue Ordinance ('IRO')
 

whether assessments excessive. [Decision in Chinese]