MASOURIS ν. REPUBLIC & ANOTHER (1989) 3A CLR 946

(1989) 3A CLR 946

1989 August 10

[SAVVIDES, J.]

IN THE MATTER OF ARTICLE 146 OF THE CONSTITUTION

CHRISTODOULOS MASOURIS,

Applicant,

THE REPUBLIC OF CYPRUS, THROUGH THE

MINISTER OF FINANCE AND ANOTHER,

Respondents.

(Case No. 295/85)

Taxation - Income Tax - Trading in land - Factors that may taken into consideration in determining the issue - The character of the land purchased, its state of development and future potential, production of income, repetition of transactions of similar nature, duration of ownership of property in question, fact that land was purchased jointly with persons whose main occupation had nothing to do with farming or cattle breeding, parcellation of land into building sites, change of intention following acquisition of property.

Taxation - Interest - The Assessment and Collection of Taxes Laws 1978-79, section 42(2) - "Unjustifiable omission" - It is a failure to give any notice, make any return, produce or furnish any document or offer information required by or under the Law.

Taxation - Surcharge - The Assessment and Collection of Taxes Laws 1978-79, proviso to section 29(1) - It cannot operate in favour of the applicant as the question raised is not one of a clearly legal point not determined, but it is a point of mixed Law and fact.

Taxation - Income Tax - Objection to assessment - The Assessment and Collection of Taxes Laws 1978-79, section 20- Whether in dealing with an objection the Commissioner can increase the object of the tax without raising an additional assessment pursuant to the provisions of section 23 - Question determined in the positive.

The applicant purchased jointly with others land at Kaimakli of an area of about 64 donums for £l.000 in 1951. At the time the land was agricultural land. The co- purchasers were not farmers. The applicant was a farmer until the invasion by Turkey in 1974.

The land was divided into 73 building sites in 1956. Most of such sites were either sold or donated.

The applicant failed to disclose in his returns or capital statement all the information regarding all the sales of such building sites. When he was assessed to pay income tax for the years in question, the applicant objected, whereupon the Commissioner, having obtained information as regards sales of building sites, increased the object of the tax, because it included therein the profit realised from such sales during the years in question.

The Court accepted that the decision that the applicant was a trader in land and that, therefore, the land in question was stock in trade and the profit realised by its sale is subject to income tax, was reasonably open to the respondents.

The principles enunciated by the Court, in dismissing this recourse, sufficiently appear in the hereinabove Headnotes. In the course of its judgment the Court referred to in detail to the Case Law relating to the factors that appear in the first of the hereinabove Headnotes, which were the factors, that were in fact taken by the respondent Commissioner into consideration in arriving at his conclusion.

Recourse dismissed. No order as to

costs.

Cases referred to:

Georghiades v. Republic (1982) 3 C.L.R. 659,

HadjiEraclis and Another v. Republic (1984) 3 C.L.R. 604

Amani Enterprises v. Republic (1985) 3 C.L.R. 198,

Edward v. Bairstow and Harrison 36 T. C. 207,

Snell v. Rosser Thomas & Co. Ltd. 44 T.C. 343,

J. Balton & Son Ltd v. Farrelly [1953] 34 T.C. 161,

Pickford v. Quirke [1927] 13 T.C. 251,

Turner v. Last [1965] 42 T.C. 517,

Commissioners of Inland Revenue v. Livingston [1926] 11 T.C. 538,

Commissioners of Inland Revenue v. Toll Property Co. Ltd [1952] 34 T.C. 13,

Mitchell Bros. v. Tomlinson (H. M. Inspector of Taxes), 37 T.C. 224.

Taylor v. Good [1973] 2 All E.R. 785.

Michaelidou v. Republic (1985) 3 C.L.R. 1836,

Ioannides v. Republic (1985) 3 C.L.R. 1801.

Recourse.

Recourse against the income tax assessments, raised on applicant for the years 1979-1980.

G. Triantafyllides, for the Applicant.

Y. Lazarou, Counsel of the Republic B, for the Respondents.

Cur. adv. vult.

SAVVIDES, J. read the following judgment. Applicant by the present recourse challenges the income tax assessments for the years of assessment 1979 (78) to 1980 which were raised and determined by the respondent Commissioner of Income Tax (hereinafter to be called "the respondent").

Applicant applies for the following relief:

"1. Declaration that assessment No.280286 - 33/84 for the year of assessment 1979 (78) and/or the decision of the respondents to impose tax on Applicant amounting to £312.25 and/or any other sum or at all and/or the decision to include in Applicant's taxable income the amount of £1320.- and/or interest on the additional tax demanded from 1.12.79 is null and void and of no effect whatsoever.

2. Declaration that the assessment No.280286-79/84 for the year of assessment 1979 and/or the decision of the Respondents to impose income tax on Applicant amounting to £1729.90 and/or any sum or at all and/or the decision to include in Applicant's taxable income the amount of £4690.- and/or interest on the additional tax demanded from 1.7.80 is null and -void and of no effect whatsoever.

3. Declaration that the assessment No.280286-80/84 for the year of assessment 1980 and/or the decision of the Respondents to impose income tax on Applicant amounting to £678.10 and/or any sum or at all and/or the decision to include in Applicant's taxable income an amount of £2000.- and/or interest on the additional tax demanded from 1.7.81 is null and void and of no effect whatsoever.

4. Declaration that the decision of the Respondents to impose and/or demand an additional 10% surcharge on the amount of the additional tax demanded amounting to £151.60 for the year 1979 and £57.90 for the year 1980 and/or any other sum or at all is null and void and of no effect whatsoever."

Applicant was a farmer up to the Turkish invasion in July, 1974, at the area of Kaimakli - Tympou. During the material years he derived income from rents, a pension and as from 1978 commission from the sale of meat.

Applicant together with two other persons purchased on 24th October, 1951, land at Kaimakli of an area of about 64 donums for £1,000.- and in 1956 they divided part of the said land into 73 building sites. Most of the building sites were either sold or donated during the years 1957 - 1980 according to information obtained by the respondent from the Lands and Surveys Department.

Applicant's tax affairs were examined by the respondent Commissioner of Income Tax on the basis of capital statements as on 3rd March, 1970, and 31st December, 1980, following the objections filed against the assessments, subject- matter of this recourse. Applicant's taxation consultants were asked by the respondent on various occasions to supply him with information regarding applicant's land dealings but failed to do so. Relevant in this respect are letters dated 28th July, 1978 and 23rd August, 1982, which were addressed to Mr. Phanos Ionides, applicant's consultant, photocopies of which have been attached to the Opposition, marked as Appendices "B" and "C".

When the tax affairs of the applicant were last examined by capital statement as on 3rd March, 1970, he was not considered as a dealer in land because applicant did not disclose all relevant facts to the respondent Commissioner relating to land dealings. In the examination up to the 3rd March, 1970, applicant declared, however, that he had sold four building sites during the years 1967 - 68 whereas the respondent later discovered from inquiries made at the Land Registry Office that applicant sold 13 building sites in the said years.

Applicant's case was discussed between the respondent Commissioner and applicant's taxation consultant on various occasions as to the tax liabilities of the years, subject-matter of this recourse, the assessments on which were under objection on the ground that they were excessive. The result of the discussion was that applicant and the respondent agreed on the amount of the taxable income from sources other than the profit from the sale of building sites for the years 1978/77 to 1983 including also the years subject-matter of this recourse but no agreement could be reached as to the assessment of the profits from the land dealings for the years 1978, 1979 and 1980. The said dealings were the following:

(a) A building site under registration No. D 374 (applicant's share 1/3rd) sold in 1978 at £400.-

(b) A building site under registration No. D 407 sold in 1978 for £2,000.-

(d) A building site under registration No. D 363 sold in 1980 for £2,000.-

All the above building sites are located at Kaimakli and were part of those developed in 1956 from a plot of about 64 donums acquired in 1951.

The taxable profit, therefore, was arrived at by deducting from the sale proceeds the cost (£210.-) and division expenses (£100.-) for each building site.

The respondent Commissioner after taking into consideration all factors pertaining to the particular transaction concluded that applicant had embarked upon an adventure in the nature of trade and the realized profits from this particular transaction were liable to income tax. As no agreement could be reached the respondent proceeded with the determination of the assessments. subject-matter of this recourse, and communicated to applicant his reasoned decision by letter dated 22nd December, 1984, together with final notices of tax payable dated 22nd December, 1984. The contents of such letter read as follows:

"I refer to your objections against the assessments of your income for the years of assessment 1978 to 1983 (years of income 1977 till 1983) and to the letters of your Consultant on taxation matters Mr. Phanos lonides, dated 14th and 28th November, 1984 and wish to inform you that I decided that you should be assessed as follows:

(a) For the years of assessment 1978/77, 1981, 1982 and 1983 during which your income was derived from commissions from the sale of meat, old age pension and rents you will be assessed on the amounts we have agreed.

(b) For the years of assessments 1979 till 1980 (years of income 1978 till 1980) you will be assessed in addition to the agreed sums with the profit realized from the sale of building sites as it appears in the attached statement.

2. I wish to inform you that I reached the conclusion that you were trading in land for the following reasons:

(a) The fact that three persons (including yourself) joined together in a common enterprise to purchase and register in your names in 1951 a piece of land of an extent of about 66 donums at Kaimakli;

(b) The said land had ceased to be used for agricultural purposes but acquired development value as land ripe for division into building sites.

(c) In 1956 You jointly divided about 2/3rds of the said land into 72 building sites and you used to sell such sites almost every year from 1977 till 1980.

(d) You have purchased and sold other immovable property.

3. The reason that you were not assessed with profit from the sales of building sites during the previous years i.e. before 1970 was due to the fact that you omitted to give particulars in connection with the sale of building sites and also of the building sites which remained unsold, in your capital statement of 22nd July, 1964. whereas you had proceeded into the division of land and together with your other partners had sold 19 building sites between the 1st January, 1957 and the 22nd July, 1964. Also in your capital statement as on 3.3.1970, you declared that you sold only four building sites for the years 1967 and 1968 whereas you sold jointly with the others 17 building sites as from 22nd July, 1964 till 3rd March, 1970.

4. Concerning your last capital statement you declared that you sold only two building sites in 1979 whereas you have sold jointly or alone 13 building sites during the period 3.3.70 till 31.12.80. In addition to the above I wish to observe that you failed to give a reply to my letters dated 28th July, 1978 and 23rd August, 1982, whereby I was asking detailed particulars in connection with the division and sale of your building sites for the period 1970 to 1980.

5. In view of the above I have decided to assess you for the years of taxation 1979/78, 1979 and 1980 in addition to the agreed sums with the profit realized from the sale of four building sites.

6. I enclose herewith notices of assessment for the years of assessment 1978/77 till 1983 and if you feel that any injustice is done to you as a result of my above decision you may file a recourse with the Supreme Court within 75 days from the date of the assessments. I also enclose notices of assessment for special contribution for the quarters 1/77 till 4/80."

On the 26th February, 1985, the respondent informed the applicant that by oversight he failed to deduct his contributions to Social Insurance and the 10% earned income relief for the income from the sale of building sites and as a result he cancelled the assessments of the 22nd December, 1984, and issued new ones in order to grant the above relieves.

Copy of this letter was sent also on the same day to the applicant's consultant on taxation matters Mr. Phanos lonides. Obviously such letter had not been received by the applicant prior to the filing of the recourse.

Due to the fact that the present recourse had already been filed, the respondent Commissioner, by a subsequent letter to the applicant dated 3rd May, 1985, with copy to his taxation consultant informed him that he withdraw his letter of 26th February, 1985, as well as the assessments enclosed therewith, for the reasons stated in his letter, the contents of which read as follows:

"With reference to my letter of 26th February, 1985, with which I have sent you new amended assessments for the years 1979 and 1980 (years of income 1978 and 1980) and in view of the fact that you have filed a recourse in the Supreme Court (No.295/85) against the assessments which I had sent with my previous letter of 22nd December, 1984, I wish to inform you that I hereby withdraw my letter dated 26th February, 1985, as well as the assessments sent to you together with such letter so that you will not be obliged to file a new recourse.

Concerning the deductions for contribution to social insurance, deduction of old age and the 10% deduction on the profit realized from the sale of building sites, they will be granted to you when the final assessments will be made after the decision of the Court."

A number of legal grounds are set out in the recourse in support of the relief sought. By his written address learned counsel for applicant expounded on his grounds which may be grouped as follows:

(a) That the respondent could not demand tax on a figure of profit higher than the figure of profit in the assessments under objection which he had determined without first raising additional assessments pursuant to the provisions of s.23 of the Assessment and Collection of Taxes Laws, 1978 -79, in order to afford the taxpayer the opportunity to object and defend himself.

(b) All acquisitions of immovable property made by the applicant were for investment purposes and, therefore, the respondent was wrong in treating the profit made from the disposal of the building sites by the applicant in 1979 and 1980 as income derived from an adventure in the nature of trade.

(d) The notices of assessment are also wrong because although the respondent treated the said profit as profit from the exercise of a trade in land he nevertheless did not grant to the applicant earned income relief on the amount of the profit assessed.

Expounding further on ground (a) learned counsel for applicant submitted that the proceedings envisaged under s.20 of the relevant laws do not empower the Commissioner of Income Tax at the stage of determination of the objection to demand a higher amount of tax than the tax appearing in the assessments under objection and that if the respondent wished to demand a higher amount of tax than the tax appearing in the assessments under objection the correct procedure would be to raise an additional assessment pursuant to the provisions of s.23 in order to give the taxpayer the opportunity to object and defend himself.

In support of ground (b) learned counsel submitted that the Income Tax Office had examined the taxability of the profits from the building sites in question on two previous occasions, once in the case of Mr. I. Kolakkides who was one of the three joint owners and once in 1972 when applicant's tax liability in respect of the years 1965(64) to 1969(68) was settled and excluded for income tax purposes the profit made on the ground that the deal was a realization of a capital asset and, therefore, he cannot now, after the lapse of almost thirty years and on substantially the same facts treat the applicant as a trader in land.

In dealing with ground (c) he submitted that the demand of interest on the amount of the additional tax and of a surcharge of 10% is contrary to law and to the principle of administrative law, because the point whether the profit in question is liable to income tax or not is purely a legal point and the applicant was not guilty of either deliberate omission or fraud as he genuinely believed that he was not liable to pay additional tax.

Learned counsel for the respondents in answer to the arguments advanced by learned counsel for applicant in respect of ground (a) contended that the power of the respondent Commissioner to raise a higher figure upon determination of an objection is derived from the provisions of s.20(5) of the Assessment and Collection of Taxes Laws 1978-1979.

In dealing with ground (b) learned counsel for the respondents submitted that it was reasonably open to the respondent to treat the profits which the applicant realized from the sale of the four building sites as taxable. He argued that the issue of taxability of profits arising from the sale of land is a question of mixed law and fact which has to be decided on the evidence before the Court and concluded that there was ample evidence supporting the decision reached by the respondent that the transactions in question were trading transactions. He also referred the Court to a number of decided cases as to the factors which the Commissioner may take into consideration and which in fact he took into consideration in the present case in reaching his conclusion that the profits under consideration were trading receipts.

Such factors, counsel submitted, were:

(a) The character of the land purchased, its state of development and future potential.

(b) Repetition of transactions.

(d) The land was purchased jointly with persons whose occupation had nothing to do with farming or cattle breeding.

(e) The division of the land into building sites.

(f) Any original intention in respect of the purpose of acquisition of this land undoubtedly changed from the time the land came within the Major Water Supply Area of Nicosia and this is manifested by the fact that the owners went in for a system of land development with regard to part of the property, so as to take advantage of the opportunity which arose with the supply of water.

Counsel further submitted that applicant's counsel's contentions about interest and surcharge are untenable. The question as to whether the dispute was a legal one or not had nothing to do and is completely irrelevant under the provisions of the law. The imposition of such interest and tax was properly made tinder the provisions of s.42(2) of the Assessment and Collection of Taxes Laws. 1978 - 1979, once there was unjustifiable omission on the part of the applicant to submit any notice or make any return as required by law.

Finally, in dealing with the contention that the respondent Commissioner had examined the issue on two previous occasions as mentioned by counsel for applicant, the respondent denied same and contended that it was erroneous. What happened in fact, counsel submitted, was that the respondent had examined the issue only once before in the case of the applicant and the reason that the applicant was not taxed on the profits which he realized before 1970 from the sale of building sites was due to the fact that he had deliberately omitted to submit particulars regarding the parcellation and sale of the subject property and to declare his other dealings in land as mentioned and explained to the applicant by respondent's letter dated 22nd December, 1984 to which reference has already been made. and which operated to the benefit of the applicant.

The question which poses for consideration in the present case is whether it was reasonably open to the respondent to treat the profits which the applicant realized from the sale of four building sites as taxable.

The issue of taxability of profits arising from the sale of land has been considered by the Supreme Court in a number of cases. (See, inter alia. Georghiades v. The Republic (1982) 3 C.L.R. 659: HadjiEraclis and Another v. The Republic (1984) 3 C.L.R. 604; Amani Enterprises v. The Republic (1985) 3 C.L.R. 198). What emanates from the above authorities is that the question is one of mixed law and fact and. also that the Court will not interfere with the findings of the Commissioner of Income Tax if it was reasonably open to him so to find on the evidence before him.

In the present case the various factors which the respondent Commissioner took into consideration and which contain evidence on which he relied have already been mentioned in this judgement when dealing with the arguments advanced by counsel for the respondents.

I shall deal with each one of these factors in the order argued by learned counsel for the respondents.

(a) The character of the land purchased. its state of development and future potential.

The land under consideration had ceased to be pure agricultural land in view of the gradual expansion of Nicosia in that direction which enshrined the property for development potential.

In Georghiades v. The Republic (supra) at p.670 the following were emphasized: "The character of the land purchased, its state of development and future potential, as well as the income it yields at the time of purchase or is likely to yield in future, is a most consequential factor".

A similar view was expressed in Edwards v. Bairstow and Harrison 36 T.C.207, namely, that when the subject-matter cannot yield to its owner any income or personal enjoyment merely by virtue of ownership a commercial transaction is indicated.

The applicant in the present case, according to the evidence in the hands of the respondent, never submitted a return showing that he had any income from the subject property prior to its parcellation.

In Snell v. Rosser Thomas & Co. Ltd. 44 T.C., 343. the taxpayer - a developer bought a house and 5 3/4rd acres of land. The house produced rent from the tenants but the land produced no income. It was held that the land was stock-in- trade.

(b) Repetition of the transaction.

From what emanates from a series of decided cases in England the fact that the taxpayer has engaged in repeated transactions of a similar nature is an important factor in deciding whether or not trade is carried on.

In J. Bolton & Son Ltd. v. Farrelly [1953] 34 T.C. 161 where the taxpayer company, which run a passenger boat service, bought a large number of boats for a short time for the service and resold them after modification, Harman J., agreed that the Commissioner's finding that there was a trade was inevitable. He said the following at p.167: "I have had a lot of cases..but are merely illustrations about what is not and what is an activity in the nature of trade. A deal done once is probably not, though it may be. Done three or four times it usually is".

A similar view was expressed by Rowlatt, J., in Pickford v. Quirke [1927] 13 T.C. 251 at p. 263 as follows: "Now of course it is very well known that one transaction of buying and selling a thing does not make a man a trader, but if it is repeated and becomes systematic, then he becomes a trader and the profits of the transaction, not taxable so long as they remain isolated become taxable as items in a trade as a whole...".

In the Pickford case (supra) a taxpayer was one of a syndicate who purchased the shares of a mill company, liquidated the company and sold its assets, at a profit, to another company formed for the purpose. The taxpayer had engaged in four transactions of this nature, each resulting in a profit to him. The Court of Appeal held that although the transactions, considered separately were capital transactions, they together constituted the carrying on of a trade.

In the present case the applicant had engaged in repeated transactions of buying and selling immovable property which he had omitted to declare to the respondent Commissioner. During 1963 he purchased in three separate transactions, three pieces of land according to evidence in the hands of the respondent Commissioner obtained from the Land Registry Office, under registration Nos.J76, J79 and N.13. Plots J76 and J79 were sold to Marika Christodoulou in 1969 and plot N.13 was sold to Michael Pieri in 1978.

The relevance of a short period of ownership as an indication of trading was stressed by Cross, J. in Turner v. Last [1965] 42 T.C. 517 at pp.522-523 as follows:

"A man may buy something, whether it be land or a chattel, for his own use and enjoyment with no idea of a quick resale, and then, quite unexpectedly, he may receive an offer to buy which is too tempting to refuse. That is a perfectly possible state of facts: but the fact that there was a quick resale naturally leads one to scrutinise the evidence that it was not envisaged from the first very carefully."

It was the submission of the respondents in this respect that the land under consideration was divided into building plots just after five years of its registration in the names of the applicant and his partners. This relatively short period between registration and parcellation is inconsistent with the allegations that the land was purchased solely for farming purposes and tends to support the inference that the applicant was carrying on a trade.

(d) The land was purchased jointly with persons whose main occupation had nothing to do with farming or cattle breeding.

The contention of the respondents in this respect is that the applicant's main occupation was that of a butcher whereas that of his partner Mr. I. Kolakkides was that of a timber and building materials merchant.

In the submission of learned counsel for the respondents this factor strengthens the inference that the land was acquired as trading stock and not for farming purposes.

I find such submission a sound one.

(e) The parcellation of land into building sites.

The parcellation of the land into building sites was another factor which the respondent Commissioner considered significant as indicating a trading transaction. In this respect counsel relied, inter alia. on the dicta in Commissioners of Inland Revenue v. Livingston [1926] 11 T.C.538. In that case a cargo vessel was purchased as a joint venture by three individuals who converted it into a steam-drifter and sold it at a profit. The fact that they had not engaged in trade was overruled and it was held that such a transaction was in fact carrying on a trade.

In this respect counsel for the respondents conceded that the test is not by any means decisive in cases relating to real property. However, in appropriate instances such as the present one where other elements of trading are present the division of the land into building sites may lead to an inference in support of a finding of trading as in the case of Commissioners of Inland Revenue v. Toll Property Co. Ltd [1952] 34 T.C, 13 were stress was laid on expenditure incurred to enhance the value of the land.

(f) Whatever the intention at the time of the acquisition of the property such intention undoubtedly changed once the land came within the Major Water Supply Area of Nicosia.

It was the contention of the respondents that, even assuming that the property was acquired with no thought of trading as alleged by applicant, his intention undoubtedly changed from the moment the land came within the Major Water Supply Area of Nicosia and the applicant went in for a system of land development with regard to part of the subject matter by selling building sites, so as to take advantage of the opportunities for development which arose with the expansion of the Water Supply.

This contention of counsel for respondents finds support in the cases of Mitchell Bros. v. Tomlinson (H. M. Inspector of Taxes). 37 T.C. 224 and Taylor v. Good [1973] 2 All E.R. 785.

As mentioned earlier on the basis of decided cases by this Court the Court does not interfere with a decision of an appropriate authority if such decision is reasonably open to it on the material before it.

The position was clearly summarized by the Full Bench in the case of Georghiades (supra) where at pp.668-669 the following were stated:

"Unlike the powers vested in the District Court before independence to adjudicate upon a taxation assessment by s.43 Cap.233 - and earlier by virtue of s.39 of Cap.297 (of the old edition of the Statute Laws of Cyprus), the Supreme Court has no jurisdiction to go into the merits of the taxation and substitute, where necessary, its own decision. The power of the Supreme Court is limited, as indicated, to the scrutiny of the legality of the action, and to ascertain whether the administration has exceeded the outer limits of its powers. Provided they confine their action within the ambit of their power, an organ of public administration remains the arbiter of the decision necessary to give effect to the law; and so long as they make a correct assessment of the factual background and act in accordance with the notions of sound administration, their decision will not be faulted. In the end, the courts must sustain their decision if it was reasonably open to them. The same approach was sanctioned by the House of Lords with regard to the powers vested in the courts in England, to review decision of an administrative nature. In Zamir v. Secretary of State [1980] 1 All E.R. 768, they decided that the administrative decision of an. immigration officer could be impugned only on two grounds: (a) Absence of evidence on which he could reach his decision, and (b) where no reasonable person in the position of the immigration officer could reach the decision taken. The approach of the court to the validity of a taxing decision is no different from its approach in respect of any other administrative decision liable to review under Article 146."

On the material before me and bearing in mind all the factors taken into consideration by the respondent Commissioner I am satisfied that on the evidence before him it was reasonably open to him to reach the sub judice decision.

As to the complaint of the applicant about the interest imposed on the tax payable I find such complaint untenable. This issue is governed by s.42(2) of the Assessment and Collection of Taxes Laws 1978-1979 under which interest is payable in cases where the delay in making an assessment is due to the taxpayer's "unjustifiable omission", which omission as Stylianides, J., observed in Michaelidou v. The Republic (1985) 3 C.L.R.1836 at p.1852 "means a failure to give any notice, make any return, produce or furnish any document or offer information required by or under the law".

In the present case the applicant though he had been repeatedly requested to submit particulars regarding his land dealings deliberately failed to do so.

The same applies to the complaint concerning the 10% surcharge on the tax payable. Such surcharge is payable under s.29(1) of the relevant laws. The proviso to s.29(1) cannot operate in favour of the applicant as the question raised is not one of a clearly legal point not determined, but is a point of mixed law and fact.

I also find no substance in the allegation of the applicant that the respondent had no power upon the determination of the objections raised by the applicant to impose tax higher in amount than that under objection. This matter has been dealt with in the case of loannides v. The Republic (1985) 3 C.L.R. 1801 where the following opinion was expressed at p.1818, to which I subscribe:

"It was argued that the respondent Commissioner in determining an objection has only a limited power, either to sustain the objection or to overrule it but not to increase the chargeable income. This proposition is untenable having regard to the clear provisions of the proviso to sub-section (5) of s.20 of the Assessment and Collection of Taxes Law. 1978, empowering the Director to determine the amount of the object of the tax of the person objecting at an amount higher than the taxation under objection. This proviso read in the context of the law as a whole empowers the Director to increase the amount of the object of the tax, when there is an objection, without resorting to the provisions of s.23 for additional assessment. Furthermore there must be a finality to the process of the assessment of the tax and the determination of an objection should be the final stage in the process of the quantification of tax."

Finally, as to the last point raised by learned counsel for applicant that applicant is entitled to earned income relief on the amount of the profit assessed, the respondent Commissioner has already conceded according to his letter dated 3rd May, 1985, that the applicant was entitled to deductions in respect of his contributions to the Social Insurance Fund, 10% on the profit realized from the sale of building sites and his entitlement due to old age, and that he was prepared to deduct the above. The reason, as he mentioned, he did not do so at the stage was to avoid withdrawing the assessments which were already pending before the Court in the present case and make new assessments which would have necessitated the filing of a new recourse.

In view of the above admission I find it unnecessary to make any pronouncement. It suffices to state that such amount has to be deducted from the amount of the sub judice assessments.

In the result this recourse fails and is hereby dismissed and the sub judice assessments are affirmed subject to readjustment by the deduction therefrom of: (a) any contributions of the applicant to the Social Insurance Fund; (b) old age entitlement; (c) 10% on the profit realized from the sale of the building sites in question.

I make no order for costs.

Order as above.

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