clr/1987/1987_3_512.pdf

(1987)1987Apnlll [STYLIANIDES J I INTHEMATTER OFARTICLE 146 OFTHECONSTITUTION FRIXOSROUSSOUNIDES, Applicant, ν THE REPUBLICOFCYPRUS,THROUGH THECOMMISSIONER OFINCOME TAX, Respondents (Case No 712/85) Income tax— Deductibleexpenses — Travellingexpenses —Civilservant posted in Nicosia travelling to and from Lamaca for the purpose of performing overtime work atLamaca airport — Whollyandexclusivelyincurredinthe production of income — Requirement of section 11

(1)of the Income Tax Laws, 1961-1981satisfied— Whether deduction disallowedon accountof section 13(a) of thesame Lawsrefemng to expenses for«travelling between residenceandplace ofbusiness»— «Placeofbusiness*ofacivilservantisthe place where he isposted — Lamacam thiscaseisrot a*place ofbusiness» — Itfollowsthatsection 13(a)does notdisallowthedeductionoftheaforesaid travellingexpenses 5 10 WordsandPhrases 'Wholly andexclusivelyincurredintheproductionofincome* insection 11

(1)of theIncomeTaxLaws, 1961-1981and*placeofbusiness» insection 13(a)of thesameLaws Income Tax—Deductibleexpenses— TheIncomeTaxLaws 1961-1981, Sections 11

(1),13(a)and13(e)—•Civilservantposted mNicosia travellingtoandfrom Lamaca for the purpose of performing overtime work — The relevant travellingexpenses arededucticle The applicant isaCustomsOfficerposted atthe CustomsHeadquartersin Nicosia Hisincome isdenved from hissalaryand from overtimeworkdone at Lamaca airport Heworksduringoffice hoursathisoffice inNicosia The 2 0 service atLamaca airport starts after 3 p m until after midnight, sometimes endingaslateas6a m thefollowingmorning 512 15 3 C.L.R. Roussounides v. Republic Inthereturn ofincome whichtheapplicantsubmittedfortheyear 1982 he claimeda deduction of£216 -incurred astravellingexpenses from Nicosiato Lamaca The Commissioner of Income Tax refused to allow the aforesaid deduction and asaresult the applicant filed the present recourse 5 Thesubjudicedecision wastaken onthe following grounds namely (a) The expenses were not incurred wholly and exclusively tor the production of income (b)Thetravellingexpenses from theplaceofresidencetotheplaceofwork arenot deductible (section 13(a)of the IncomeTax Laws 1961-1981) 10 15 20 (c) The applicant's post is in Nicosia and he had no obligation to work overtime in Lamaca The travelling expenses were not incurred dunng the performance ofapplicant sduties becausesuchdutiesbeganasfrom thetime of applicant samval at Lamaca airport Held, annulling the sub judice decision

(1)The relevant statutory provisions are section 11{1)and section 13(a) and 13(e)ol the Income Tax Laws, 1961 1981*

(2)The respondent Commissioner was labounng under a misconception thattheapplicant «had no obligation toworkovertime atLamaca» (Videthe letter dated 24 185 by the Director of the Department of Customs to the respondent Commissioner quoted at pp 527-528) However itmayvalidly besaid that the substantial question in thiscase isnot whether the applicant had anobligation towork overtime atLamaca airport

(3)Thequestions,which pose fordetermination are 25 (

1. a)Whether the travelling expenses in question were wholly and exclusivelyincurredintheproduction orforthepurposeofacquinngthe income (sections ll(l)and 13(e)) and (
2. b)If yes, whether they represent the cost of travelling between residence and placeofbusiness 30 05

(4)Asregardsquestion (a)the matenal wordsof section 11

(1)are «wholly andexclusivelyintheproductionoftheincome» Thetestisobjectiveandnot subjective Itisessentialtohaveclear findings of fact on certain matters ThereisnothinginourLawprovidingthattheexpensesshouldbeincurred «dunng the performance of the duties» In this case, though no income is produced dunng the journey toand from Lamaca suchjourney ismadeby theapplicant for one purpose only theproduction ofincome Itfollowsthat theapplicantsatisfies therequirementsof section 11

(1)Thisanswersaswell theprovisionofsection 13(e) *Theaforesaidsectionsarequotedatpp 526 527post 513 Roussounldes v. Republic

(5)As regards question (b)the matenalwords for thiscase of section 13(

1. a)are •travelling between residence and place of business» In the case of a civil servant the «place of business» is the place of his posting The travelling expenses between the place of the residence of the civilservant and the«place of business» are notdeductible However, the Law does not refer to a person who has dual location of business Acivilservant posted atplace Aand then obliged togo toplace Β to perform certaindutiesthere, has totravel toplace Β Thesecond placeof work is notwithin the ambit of the expression «place of business» of section 13(
2. a)The statutory provision disallowing the cost of travelling between residence and place of business relates only tothe travelling of the taxpayer from his residence to hisoffice at Nicosia and notto the travelling from the place of his posting to Lamaca,which is not«a place of business», this being inNicosia c 10 15 Subjudice decisionannulled Respondent topay £50-towards applicant'scosts Casesreferred to Nolder(HM Inspectorof Taxes) ν Walters,15ΤC 380. Bolamv Barlow[1949] 31 Τ C 136, 20 Burton ν Rednall(HM Inspectorof Taxes)[1954]35 ΤC 435, Sanderson ν Durbndge[\9S5]36 ΤC 239, Rickettsv Colquhoun(HM Inspectorof Taxes),10TC 118, Owen ν Pook (Inspector of Taxes) [1969] 2 All ΕR 1, Taylorv Provan(Inspectorof Taxes)[1974] 1All ΕR 1201 25 Recourse. Recourse against thevalidity of the income tax assessment for the year of assessment 1982 inrespectof thedecision notto allow travelling expenses from Nicosia, where applicant's residence is situated, totheplace of his overtime work atLamaca. 30 A. Haviaras, for theapplicant. Y,Lazarou, for therespondents. Cur. adv. vult. STYUANIDES J. read the following judgment. The applicant 514 3 C.L.R. Rousaounldes v. Republic Styllanldea J . by this recourse challenges the validity of the income tax assessment for the year of assessment 1982 in respect of the decision not to allow travelling expenses from the place of residence - Nicosia - tothe place of overtime work -Lamaca 5 Theapplicant is a Customs Officer posted attheCustoms Η Q in Nicosia His income is denved from his salary and overtime work done atLamacaAirport Heworks dunng office hours athis office in Nicosia The service at Lamaca Airport starts after 3 00 ρ m untilafter midnight,sometimes ending as lateas 6 00 a m in 10 the morning Thetermsandconditionsof employment ofcustomsandexcise officers appearintheschemeofservice fortheirrespective posts The applicant together with othercustoms officers wrote tothe respondent on 15 2 84 claiming a deduction from their overtime 15 work at Lamaca Airport in respect of travelling expenses from NicosiatoLamaca Therespondenthaving consideredtheirclaim decided that their case could not be satisfied as the expenses claimed did not fall within the provisions of Section 11 of the IncomeTax Law -(Appendix «C» totheopposition) 20 Theapplicant submitted hisreturnfor incomefor theyear 1982 on 6 10 83 in which he declared his salary and claimed certain deductions including travelling expenses of £216 -incurred from NicosiatoLamaca, which as he stated,were necessanly incurred andwhich were notreimbursed by his employer 25 On 25 9 84 the respondent issued an assessment based on the return but the travelling expenses were not allowed as a proper deduction for income tax purposes The applicant objected tosuch assessment stating thatthe said expenses were incurred wholly and exclusively in producing the 30 income from overtime - (Appendix «F») -and were not costs of travelling between residence and «τόπος ετταγγέλματός» («the place of his post») The respondent determined the applicant's objection, he decided that applicant's aforesaid claim was not acceptable and communicatedhis such decision totheapplicant 35 by letter dated 4 7 85 I consider pertinent to set out senatim the letter of 4 7 85 containingthesub-judice decision -(Appendix «G»)«Αναφέρομαι στην ένσταση 515 σας κατά της Styllanldes J. Rousaounldes v. Republic

(1987)φορολογίας τ ο υ έτους 1982, με αναφορά 82/84/09/05, και σας πληροφορώ ότι α φ ο ύ εξέτασα την εν λόγω ένσταση σας αποφάσισα να βεβαιώσω τη φορολογία σας χωρίς να αφαιρέσω από τ ο εισόδημα σας τ α έξοδα μετάβαση σας από τ η Λευκωσία, όπου είναι η κατοικ'α σας, στο αεροδρόμιο Λάρνακας όπου εργάζεστε υπερωριακή εργασία. 2. Η α π ό φ α σ η μου να μη αποδεκτώ τ ο αίτημα σας που αφορούσε ποσό £216,αναφορικά με τ α πιο πάνω έξοδα, βασίστηκε στους πιο κάτω λόγους: c . 10 (α) Τα εν λόγω έξοδα δεν επιτρέπονται σαν έκπτωση στον υπολογισμό τ ο υ φορολογητέου εισοδήματος σύμφωνα μετιςπρόνοιεςτωνάρθρα>ν11

(1)και13(

1. a)των περί Φορολογίας τ ο υ Εισοδήματος Νόμων τ ο υ 19611981, γ ι α τ ο λόγο ότι δεν έγιναν καθολοκληρια και 15 αποκλειστικά για την κτήση τ ο υ εισοδήματος σας. (β) Τα έξοδα μετάβασης από τον τόπο διαμονής στον τόπο εργασίας δεν επιτρέπονται σύμφωνα μετ ο άρθρο 13(
2. a)των περί Φορολογίας τ ο υ Εισοδήματος Νόμων τ ο υ 1961-1981. 20 (γ) Η έδρα σας είναι η Λευκωσία και σύμφωνα με πληροφορίες που πήρα δεν είχετε υποχρέωση να εργαστείτε υπερωριακώς στη Λάονακα. Τα έξοδα μετάβασης οας απο τη Λευκωσία στη Λάρνακα δεν έγιναν στη διάρκεια εκτέλεσης των καθηκόντων σας 25 γιατί τ α καθήκοντα σας άρχιζαν από τη στιγμή που θα εφθάνετε στον τόπο προσφοράς της υπερωριακής σας εργασίας που ήταν τ ο αεροδρόμιο της Λάρνακας». («I refer to your objection against the assessment for the year 1982, under reference 82/84/09/05and Iherebyinform -30 you that, having examined your said objection, Idecided to assess your taxation without deducting from your income the travelling expenses from Nicosia, where you reside, to the Lamaca airport, where you are doing overtime work. 2. My decision nottoacceptyourclaimfor£216.- inrespect 35 of such travelling expenses was based on the following grounds: (
3. a)The aforesaid expenses are not deductible from your taxable income in accordance with the provisions of sections 516 3 C.L.R. Rousaounldes v. Republic Styllanldes J. 11

(1)and 13(a)of theincomeTaxLaws. 1961-1981, because they were notwholly andexclusivelymadefortheacquisition of your income. 5 10 (b)The expenses for travelling from yourplaceof residence to the place of your business are not allowable in virtue of srriion 13'a* of the IncomeTax Laws. 1961-1981. (

1. c)Your post is in Nicosia and in accordance with information I received you were notbound towork overtime at Lamaca. The travelling expenses from Nicosia to Lamaca were not made during the performance of your duties, because such duties began as from the time of your arrival at the place of your overtime work, that is at Lamaca airport»). Counsel for the applicant submitted that these travelling expenses were incurredwholly and exclusively intheproduction 15 oftheincome,theobject of thetax;thattheprovisions of paras,(
2. a)- (
3. h)of Section 11

(1)are not exhaustive; that the provisions of Section 13 should be interpreted restrictively. The applicant was posted at the office of the Directorof the DepartmentinNicosia. His office or place of business is Nicosia and the phrase «τόπος 20 επαγγέλματος» («place of business»)ins.13(

1. a)should be limited tothe Nicosia office andnothissecond place of work where heis obliged to perform duties, i.e. Lamaca.The rendering of services atLamacaAirport was compulsory anditwas nottaken up bythe volition of the officer. The sub-judice decision is invalid in thatit' 25 suffers from misconception of fact and misconception of law. Counsel for the respondent admits that the applicant was a Customs Officer posted at Customs Headquarters in Nicosia. His duties inNicosiacommencedat7.30 a.m. andended at2.00 p.m. in the winter and 1.30 p.m. in the summer. Once he finished his 30 duties in Nicosia he joumeyed to Lamaca Airport to undertake overtime duties there. His duties began on arrival at Lamaca Airportandtheincomewas derived from work relatedsolelytothe servicesrenderedby himwhilst atLamacaAirport. He contended thatthe expenditurewhich the applicant incurred in travelling to 35 LamacaAirportwas not incurred intheproductionof his income because he did not begin toproduce/acquiresuchincomeuntilhis arrival and assumption of his duties at Lamaca Airport;that the expression «τόπος επαγγέλματος» («place of business») in s.13(
2. a)encompasses not only the regular place of a person's 517 Styllanides J. Roussounldes v. Republic

(1987)employment but also the place where such person renders overtime services, wherever that place might happen to be. He further submitted that although the applicant may have been obliged to do overtime work and, therefore, he had to get to Lamaca Airport, he is, nevertheless, not entitled to deduct the 5 expenditure incurred intravelling there and back because at the time ofthejourneyshewasnotproducingtheincomefrom which the expenditure issought tobe deducted.· Insupport of hisargumentshe citedanumber ofEnglish cases, including Nolder (H.M.Inspector of Taxes) v. Walters,15 T.C. 10 380; Bolam v. Barlow, [1949} 31 T.C. 136; Burton v. Rednall (H.M. Inspector of Taxes), [1954] 35 T.C. 435; Sanderson v. Durbridge,[1955]36T.C.239. Thiscasehastobedetermined ontherelevantCyprusstatutory provisions -Sections 11

(1)and 13(a)and 13(e)ofthe IncomeTax 15 legislation and the facts ofthe case.Though the English statutory provision is different, a review of the English case-law is useful, more so as reliance was placed on same by counsel for the respondent. In Ricketts v. Colquhoun (H.M.Inspector of Taxes), 10 T.C. 20 118, the substantial question was whether the appellant, a barrister, having hischambers in London, who held the office of Recorder of Portsmouth, was entitled to deduct from the emoluments of his office as Recorder the cost of travelling between London and Portsmouth in order to attend the Quarter 25 Sessions. Rowlatt,J., inhisfirst instancejudgment saidat p.121:«Itis, of course, settled by the two cases which have been cited, Cook v.Knott,2T.C.246,andRevellv. EIworthyBros., 3 T.C.12,thatamancannotchargetheexpensesoftravelling from his residence, which is in his own choice, to the place 30 where he exercises his office, for reasons, which Ineed not repeat;butitissaidthatthisisnotonthesamefooting. Itistrue that a Recorder must by Statute be a barrister of five years' standing, and that inpractice means that innine cases outof tenhehastotravelfromLondontoperform hisduties,though 35 itneed notbe so.TheStatute,however,doesnotsayhemust be a practisingbarrister;stilllessdoesitsaythathemustbe a barristerpractisinginLondon. Inmyopinion theplacewhere he practises is really, in point of law, as much as the place where he resides, at his own discretion to select. In these 4C 518 3 C.L.R. 5 10 Roussounldes v. Republic Styllanldes J. circumstances it seems to me that Ican only arrive at one conclusion. The matter hasbeen complicated, in the viewof many of us who are in the habit of thinking over these dry questions, by the case of Members of Parliament, who are allowed theirtravellingexpensesasadeduction,butthenthat deduction isput upon the footing -and whether it isrightor wrongitisnotformetosay-thattheyhaveanoffice theduties of which are exercisable in two places, and involve in the performance of those duties passing from one place to the other, which, of course, makes all the difference, if that explanation issound». Inthe Court ofAppeal Pollock. M.R.. said:- 15 20 25 30 35- «Now,thefirstthingisthis,thatattheoutsetyouhavetofind that the holder is necessarily obliged to incur and defray expenses out of his emoluments, and I attach importance to those words 'necessarily obliged', because I thinktheyare to -be read as meaning this,that where an obligation isimposed upon theholderoftheoffice whichexnecessitateofthe office compelshimtomakeoutlays,itisinthosecases,andafteryou have fulfilled that condition, that you first begin to consider what isthe possible expenditure which maybe deducted». Andfurther down:«Thefirstexpenditure thatisdealt withisthatrelatingtothe expenses of travelling inthe performance of the dutiesofthe" office oremployment. Now I thinkthat meansthatwhere the office isof such a nature that in order toexecute itsdutiesits holder hasto travel from place toplace, has, inother words, itinerant duties, there the expenses of such travelling necessary to and involved in the work attached to the office are and may be allowed as an expense, the obligation of which isnecessarilyincurredbytheholderoftheoffice. Now, upon consideration, the travellingwhich isinquestion inthis case isnot of that nature. The duties of a Recorder are tosit and to hear the casesthat come before him.ARecorderhas, so faras1know,inthiscaseifnotinallcases,nodutieswhich would take him from one Court toanother inthe capacityof theparticularRecordership which he holds». Andfurther down:«... that the Appellant travelled from London to hold his 519 Styllanldes J. Rousaounldes v. Republic

(1987)Courts at Portsmouth and returned toLondon atthe closeof theSessionswas,inmyjudgment,acourseprescribedforhim by hisown convenience asapractisingLondon barrister and by nothing else. But his position and activities as such had nothing todo withthe performance of hisduties asRecorder 5 of Portsmouth». In the House of Lords the question depended entirely on the proper construction ofparagraph 7,Schedule 9,that reads:«lf the holder of an office or employment of profit is necessarily obligedtoincuranddefray outoftheemoluments 10 thereof the expenses of travelling in the performance of the duties of the office or employment, or of keeping and maintaining a horse to enable him to perform the same, or otherwise to expend money wholly, exclusively and necessarilyintheperformance ofthesaidduties,theremaybe 15 deducted from the emoluments to be assessed the expenses JOnecessarily incurred and defrayed». Mr. Ricketts, the appellant, had no finding to show either that he had to reside at a distance from Portsmouth or that no one could have been appointed to the office who could reside in 20 Portsmouth. So, it was true to say on the facts found in the case that hiscontinuing toreside in London was«theresultof hisown volition». Viscount Cave,L.C.,saidatp.133:«They must be expenses which the holder of an office is 25 necessarilyobligedtoincur-thatistosay,obligedbythevery factheholdstheoffice,andhastoperform itsduties-andthey mustbeincurredin,thatis,inthecourseof,the performance of those duties.The expenses inquestion inthis case do not appear to me to satisfy either test. They are incurred, not 30 because the Appellant holds the office of Recorder of Portsmouth, but because, living and practising away from Portsmouth, he musttravelto that placebefore he can begin to perform his duties as Recorder, and having concluded thoseduties,desirestoreturn tohishome.Theyareincurred, 35 not inthecourseofperforming thoseduties,butpartly before heentersuponthem,andpartlyafter hehasfulfilled them.No doubt the Rule contemplates that theholder ofan office may have totravel intheperformance of hisduties,and there are offices of which the duties have to be performed in several 10 places in succession, so that the holder of them must 520 3 C.L.R. Roussounldes v. Republic Styllanldes J. necessanly travel from one place toanother» Lord Blanesbugh said at ρ 135 - 5 «The language of the Rule points to the expenses with which itis concerned as being confined tothose which each and every occupant of the particular office is necessanly obliged to incur inthe performance of its duties, to expenses imposed upon each holder ex necessitate of his office andto such expenses only» And further down - 10 «Thedeductible expenses do notextend tothosewhichthe holder has to incur mainly and, it may be, only because of circumstances in relation to his office which are personal to himself orare theresult of hisown volition» InNolder (ΗΜ Inspector of Taxes)ν Walters,15Τ C 380,an 15 aeroplane pilot employed by a limited company claimed deductionsintheassessment of hisremunerationtoIncomeTaxin respect of, interalia,theupkeep of amotor-cartoconvey thepilot between theaerodrome andhis home Heresided at Purley so as to be as near the Croydon Aerodrome as possible, but admitted 20 that theoretically he was free to live where he liked It was necessary for the respondent to keep a motor-car on his own premises as the duties often commenced and ended when ordinary conveyance by public transportwas notavailable andon some occasions after he had returned home he had been called 25 upontogo outagain withinashort time Again thecase turnedon the construction of Rule 9, Schedule Ε of the Income Tax Act. 1918 Rowlatt,J ,said - 30 35 «What the statute allows to be deducted are expenses of travelling in the performance of the duties of the office, or employment, or money wholly, exclusively, and necessanly expended in the performance of the duties As regards the latterbranch, itseems quite clear thatwhat istobe allowed to be deducted are expenses 'wholly, necessanly', and so on, incurred in doing the work of the office 'Inthe performance of the duties' means in doing the work of the office, in doing thethingswhich itishisdutytodowhile doingthework ofthe office. Amanwho holdsanoffice oremploymenthas, equally necessanly, todootherthingsincidentally, andspendmoney incidentally, because he has the office He has to get to the 521 Styllanlde· J. Roussounldes v. Republic

(1987)place of employment, for one thing. If he had not got the employment, he could stay at home. As he has got the employment he has necessarily got to get there, and it costs him something, ifitisonlyshoe leather, togetthere;butthat isnotintheperformance oftheoffice, becauseingettingthere 5 he is not doing the duties, or doing the work of the office. Incidentally, he isobliged todo that,but itisnotindoingthe work of the office, which beginswhen he arrives,and setsto work to perform his duties. That seems to me to be quite a clearrule.Ithinkthatiswhat wassaidbythelearned Lordsin 10 Ricketts' case,and Ithinkitiswhat agreatmanypeople have understood for a verylongtime». In Boiam (H.M.Inspector of Taxes)v. Barlow,[1949] 31 T.C. 136,the twoaforesaid cases were followed. InBurton v.Rednall (H.M. Inspectorof Taxes),35T.C.435,the 15 appellant, the secretary of a cattle society inIpswich, was unable torent a house in Ipswich but had secured one in a village about 19milesaway.Hewasrequiredbythesocietytohaveamotor-car available inorder tovisitfarmers inthe district.He keptthe carat hishome and, althoughhepreferred totraveltoIpswichbytrain, 20 and did so when he knew that the society'sbusinesswould keep himinIpswichallday,henormallymotoredthereinordertohave the car available for anynecessary visits. He claimed that he was entitledtoadeduction from hisremuneration fortheexcesscostof travellingto Ipswichbycarovertheexpensesof goingbytrain.It 25 was held that the expense claimed could not be allowed as a deduction because itwas not incurred inthe performance of the duties of the appellant's office. The case was decided on the construction of the words«inthe performance of thedutiesofhis office» and the decision of Lord Cave in the Case of Ricketts v. 30 Clolquhoun (supra). In Owen v. Pook (Inspectorof Taxes),[1969] 2 All E.R. 1, the taxpayerwasa medical practitioner and resided atFishguard. He held part-time appointments as obstetrician and anaesthetist at Haverfordwest, 15milesaway.Underhisappointmentshewason 35 stand-by duty for emergencies as an obstetrician one weekend a month,asan anaesthetist one weekend amonth, and on Monday and Friday nights. He had to be accessible on the telephone at those times, and on receipt of a telephone calltelling him of an emergency he would give instructions over the telephone to the 40 hospital staff and then, usually, would setoff immediately for the 522 3 C.L.R. Roussounldes v. Republic Styllanldes J. hospitalbycar.Itwas heldby theHouseof Lordsthatthe taxpayer had,inrespectof theemploymentinquestion,twoplacesof work. and the expenses which were necessarily incurced in travelling between themintheperformance of hisdutiesproperlyfellwithin 5 thescope of r.7 of Sch.9 of the IncomeTaxAct 1952; accordingly the expenditure was deductible. Lord Pearceatp.7 said:- 10 15 «ltisargued thatthecaseofRickettsv.Colquhoun(Inspector of Taxes)compelsustoholdotherwise.Withallrespecttotheir Lordshipswhodecidedthatcase,Ifindit, assomeothershave done,veryunsatisfactory bothinitsresultandinitsreasoning. Inordertocarryouthisdutiesasrecorder,thetaxpayer hadto travel toPortsmouth,sincehewas aLondonpractitioner(and itwas, nodoubt,by virtue of hisLondonpracticethathe was appointed recorder). It was, therefore, unreasonable to tax him on the emoluments of his office without allowing the travelling expenses In my opinion, that case should be considered afresh by your Lordships' House». Lord Donovanatp.7 said:- 20 25 «Rule 7 of Sch. Ε requires thatthey should be 'necessarily' incurred and defrayed; and the decision of this House in Ricketts v.Colquhoun (Inspectorof Taxes)haslaiddownthat the word 'necessarily' imports an objective and not a subjective test. The expenses must be such as any holderof the employment would be bound to incur. It is not enough thatthey are incurredsimply because theemployee happens or chooses tolivesome distance from his work». The Ricketts' case was distinguished also by Lord Wilberforce. Atp.llhesaid:- 30 «What is required is proof, to the satisfaction of the factfinding commissioners, thatthe tax payer, in a real sense,in respect of the office or employment in question, had two places of work, and that the expenses were incurred in travellingfromone tootherintheperformanceofhisduties». In Taylorv.Provan(Inspectorof Taxes), [1974]1 All E.R. (H.L) 35 1201, the taxpayer was a Canadian citizen with substantial businessinterestsin Canada.Hewas aresidentofthatcountry and 523 Styllanldes J. Roussounldes v. Republic

(1987)had never lived in the UnitedKingdom. Due to his importance because of thetaxpayer's business experience in Canada,he was employed by UnitedKingdom breweries «forreasons of prestige» but he had none of thenormal duties. Because of the taxpayer's business commitmentsinCanadaitwasarranged (a)thathewould 5 do as much as possible of his work for the company in and from Canada but thatwhen itwas necessary for himtovisittheUnited Kingdom in connectionwith thatwork he would be regarded as travelling on the company's business and the company would reimburse the costs of histransatlanticair travel... and (c)thathe 10 would receive noremunerationfor hisservices. Thetaxpayer was assessed to income tax underSch. Εon thesums paid tohim by the company by way of reimbursement,on thebasisthat,as sums paid to a director by the company in respect of expenses, they were to be treated as emoluments of his office. The taxpayer 15 contended (i)that the sums were not chargeable as emoluments under s.160

(1)since they had been paid to him by virtue of his special assignment and not by virtue of his directorship, and (ii) that, if they were emoluments, the sums were deductible under Sch. 9, para. 7, tothe 1952 Act, as expenses necessarily incurred 20 intheperformance of hisdutiesasadirector.Itwas heldthatthose sums were deductible from his emolumentsunderSch.9,para.7, as expenses necessarily incurred inthe performance of the duties of his office, because his contractwith thecompany required the work to be done in Canada and, when circumstances made it 25 necessary, in the UnitedKingdom. LordReidatp.l206said:«Lord Cave, L.C., recognises that the holder of an office may have totravel ifhisdutieshave tobe performed in several places in succession. I would doubt whether such 30 travelling is always 'in the course of the performance of his duties. Ifa part-timeofficer has towork atAtoday and atΒa week hence he is not on duty meanwhile and can travel whichever day he chooses. He is entitled to deduct the expenses of travelling from AtoΒbutitseems tomeunrealto 35 say that during the hours he is travelling he is on duty. He is travelling not :n the course of performing his duties but to enable himtoperform his next dutywhen the time comes». Lord Morrisof Borth-Y-Gest atp. 1209 said:«I refer tothewords 'necessarily' and wholly' and'exclusively'. 40 524 3 C.L.R. Roussounldes v. Republic Styllanldes J. There is little room for doubt as to the meaning of those words. They are not ambiguous. 5 ΙΟ 15 20 25 30 35 Itwill, however, alwaysbe essentialtohave clearfindings of fact oncertainmatters Inthefirst place,itwillbe necessary to know what exactly was the office or employment that a personheld Inthesecondplace, itwillbe necessary toknow what exactly were the duties of the office or employment In a great many cases it might be determined that a person's obligations were tobe inanoffice atacertainplace atcertain appointed times and in that office to perform certain duties. The person concernedwould probably reside elsewhere But the position of hishomewould be a matterfor himtodecide For reasons personal to himself he might wish tolivenearto ..hiswork orhe mightwish tolivefaraway from hiswork How much time or how much,if any, expense would be involved ingetting tohiswork would be entirelyhisaffair Ifof twosuch men who had tobe in an office at a certain place atcertain appointed times so as there to perform similar duties one lived within walking distance and had no travelling expenses while the other chose to live a long distance away with consequent heavy travelling expenses it could not successfully be argued thatthelatteras theholderof an office or employment of profit was 'necessanly obliged' to incur travelling expenses nor that he was necessanly obliged to incursuch travelling expenses inperforming theduties of his office oremployment Thephrases 'intheperformance ofthe duties' or 'in performing the duties' may to some extent be inexact. There may be cases in which someone who has performed certaindutiesatplace Aisthen obliged togo onto place Β and to perform certain duties there While actually travelling between A and Β he might or might notbe able to perform anyof hisspecifically assigned dutiesbutyethemight be incumng travelling expenses inthe performance of or in performing the duties of his office or employmet On those facts he would be necessanly obliged to get from A to Β his duty would require him to travel He would be travelling on hiswork» Lord Simon of Glaisdale said that the double work-location must not be merely colourable, but also that the two places of 40 work were a necessary obligation ansing from the very natureof the office oremploymentitself and notfrom thecircumstancesof 525 Styllanldes J. Roussounldes v. Republic

(1987)the particular person appointed or employed. He only dissented on the finding of facts. Lord Salmon atp.1223 said:«Inmy view,the decision inRicketts v.Colquhoun does no morethanconfirm thepropositionthat'intheperformance of 5 the duties' must be given a strict interpretation and does not mean inordertoenable hisdutiestobe performed. Expenses incurred intravelling towork are notdeductible ...The duties of therecorderwere notitinerant.They wereallperformed in one place.Theposition of ataxpayer whose dutieshave tobe 10 performed inseveral places so thathemustnecessarily travel from one place toanotherwas notin question». Iturn now to the present case. The relevant statutory provisions areSection 11

(1)andSection 13(a)and 13(e).They read as follows:- 15 «11. -

(1)Προς εξεόρεσιν TOD φορολογητέου εισοδήματος π α ν τ ό ς π ρ ο σ ώ π ο υ θ α εκπίπτωνται άπασαι αι δαπάναι αςτο τοιούτοπ ρ ό σ ω π ο νυπέστη εξ ολοκλήρου και αποκλειστικώς π ρ ο ς κτήσιν τ ο υ εισοδήματος. Εναυταίς περιλαμβάνονται ». 20 «13. Προς εξεόρεσιν του φορολογητέουεισοδήματος π ρ ο σ ώ π ο υ τινός δενθ α εκπίπτωνται τα ακόλουθα (α) αι οικιακαί ή ατομικαί δαπάναι, περιλαμβανομένων των εξόδων μεταβάσεως α π ο του τ ό π ο υ διαμονήςεις τον τ ό π ο ντου επαγγέλματος 25 (ε) π ά σ α δ α π ά ν η ηέξοδον όπερ δεν αντιπροσωπεύει π ο σ ό ν εξ ολοκλήρου και αποκλειστικώς διατεθέν η δαπανηθέν π ρ ο ς τον σκοπόν κτήσεως του εισοδήματος». («11) -

(1)For the purpose of ascertaining the chargeable 30 income of any person there shall be deducted all outgoings and expenses wholly and exclusively incurred by such person in the production of the income,including - ». «13. For the purpose of ascertainting the chargeable income of any person nodeduction shall be allowed in respect of 35 (

1. a)domestic or private expenses including the cost of 526 3 C.L.R. Roussounldes v. Republic Styllanldes J. travellingbetween residence and place ofbusiness; 5 (e)anydisbursementsorexpensesnotbeingmoneywholly and exclusively laid out or expended for the purpose of acquiringthe income»). In paragraph 2(
2. c)of the sub-judice decision it is written that «your post is Nicosia and according to my information received you had no obligation towork overtime at Lamaca». The information to which reference ismade isthe letter of the 10 Director of the Department of Customs & Excise dated 24th January, 1985 (Appendix «E»), which was sent in answer to an inquiry by the Commissioner on the matter, the material part of which reads:15 20 25 30 «(
3. b)according to Section 4 of the Customs & Excise Law No.82/67 *...theDirectormay, ifsatisfied thatthe exigencies of public business so require, permit offices of customs & excise to be open and officers to be available there or elsewhere for the despatch of business on other days and at other times ...'. Furthermore, according to paragraph 12 of the Departmental Instructions on Overtime, 'No officer may refuse to work overtime unless on application and for just cause, isexempted inwritingbythe Director'; (
4. c)the attendance of Customs & Excise Officers from Nicosia atLamaca Airport on overtimewas agreed upon ata meeting which was held at my office on the 26 July, 1976 (photocopy of the minutes is enclosed as Appendix II). Subsequent developmentssuchasthespectacularincreasein freight andpassengertraffic attheairportaswellastheportof Lamaca have necessitated the attendance oftheNicosia staff on overtime; (d)theperiod duringwhichtheyareemployedon overtime may begin as early as 3.00 o'clock in the afternoon and last until after midnightsometimes endingaslateas6.00 o'clock inthe morning; and 35 (
5. e)the only compensation received by the officers in respect of their travel from Nicosia to Lamaca Airport and back isa commuted allowance of58 centsand itisthe same amountgrantedbytheGovernmenttotheOfficerswhotravel 527 Styllanldes J. Roussounldes v. Republic

(1987)from Lamaca totheairportfor thesame purpose. Be itnoted also that no allowance is granted by the Government in respect of expenses for meals» It may be rightly considered that the officer was bound to perform such overtime work as he could notrefuse todo so. The 5 fact thathedidnotapply totheDirectorfor exemptiondoes notin any way change the colour of such overtime. Therefore, the overtime work at Lamacawas obligatory as theincrease in freight and passenger traffic at the Airport have necessitated the attendance of theNicosiastaff onovertime.The exigencies of the 10 service required overtime work for the proper functioning of the Customs Department at the Airport. The respondent Commissioner was labouring under a misconception that the taxpayer «had noobligation towork overtimeatLamaca». Itmay validly be said that for the purposes of this case the substantial 15 question is not whether thetaxpayer had an obligation underhis terms and conditions of service to work overtime at Lamaca Airport. Two questions pose for determination:(

1. a)Whether these travelling expenses were wholly and 20 exclusively incurred in the production or for the purpose of acquiring the income; and, (
2. b)If so, whether they represent the cost of travelling between residence andplace of business. (
3. a)The material words of s.ll(
4. l)are «εξ ολοκλήρου και 25 αποκλειστικώς π ρ ο ς κτήσιν του εισοδήματος» («wholly and exclusivelyintheproduction of theincome»).Thesewords arenot ambiguous; there is no doubt as to their meaning. The test is objective and not subjective. Itis essential to have clear findings of fact on certain matters. 30 The income is produced by overtime work'as Customs Officer at LarnacaAirport. The productionof theincomestarts from the moment he resumes his duty at theAirport arid continuesduring the performance of the duties there. No income is produced during thejourney to and from Lamaca. Thejourney to Lamaca 35 is made by theapplicantfor one purpose only: theproductionof the income.The travelling expenses to and from Lamaca for the purposeof theovertimearenotincurredmainlyfortheproduction of theincomebutexclusivelyandwholly for thatpurpose. 528 3 C.L.R. Roussounldes v. Republic Styllanldes J. Expenses arenotdeductible only when they areincurredduring the performance of the duties, as decided by the respondent. There isnothinginour Law providing thattheexpenses should be incurred «during the performance of the duties»·. 5 The applicant satisfies the requirements laid down in Section 11

(1)of the IncomeTax legislation. This answers the provision of Section 13(e). (

1. b)Thematerialwords for thiscase ofs.13(a)are «μεταβάσεως α π ό τουτ ό π ο υ διαμονήςειςτοντόπον τουεπαγγέλματος». 10 Thesubstantial question inthiscase istheplaceof business andin the case of a civilservant the place where he is posted. The words «the cost of travelling between residence and place of business» have to be construed that the expenses of travelling between the residence and the office by a civil servant are not 15 deductible. A civil servant posted at Nicosia may reside at a walkingdistance from hisoffice orfaraway,depending onhisown finance, volition and other circumstances. These travelling expenses are notdeductible. When, however, he has to perform theduties of his post attwo different places intwo different towns 20 - Nicosia and Lamaca - the position is different. Ifacivil servant is posted at Lamaca and he resides at Nicosia, his travelling costs from Lamaca toNicosia are notdeductible.Iffor reasons personal to himself he might wish to live away from his place of work and incurs expenses ingetting tohis work, thisisentirely his own affair 25 and are not allowed by the Law. They are explicitly excluded by theprovision of paragraph (a)of s.13. Inthecase of acivilservant the «τόπος επαγγέλματος»isthe place of his posting where he isrequired underthe Law toattend and perform his normalregular duties. The Law does notrefer to 30 aperson who has dual location of business. Acivilservant posted atNicosia,has toattendhis office andperform theduties required of him at such office. The travelling expenses to and from that office are not deductible. Travelling expenses incurred when the taxpayer civil servant 35 has to travel to anotherplace toproduce taxable income are not excluded. Acivilservant posted atplace A,say, Nicosia,and then obliged to go to place B, say, Lamaca, to perform certain duties there,his additionaldutieswould require himtotravel toplace B. Thus he has dual location of business. This second place of work 529 Styllanldes J. Roussounldes v. Republic is not within the ambit of the expression «place of business» of s.13(
2. a)of the Law. As inordertoproducetheobject of thetaxheisobliged toincur such travelling expenses to another place than the place of his posting, these travelling expenses are deductible. 5 To sum up, the sole issue in this case is whether the travelling expenses from Nicosia to Larnaca and back incurred by the taxpayer - CustomsOfficer -for thepurpose of attendinghis duties for overtime work at the Lamaca Airport, wherefrom the taxable income was produced, are deductible. 10 Theapplicantcivilservant ispostedatNicosia,where heattends his office during all Governmentworking hours - 8.00 a.m. - 2.00 p.m. or7.30 a.m. -1.30 p.m. - andafter those hoursheis required by the Director of the Department, due to the «spectacular increase in freight and passenger traffic at the airport have 15 necessitated the attendance of the Nicosia staff on overtime» for the performance of the duties of the Department and for the properadministrationof thecountry.Hehasdual locationof duty. The statutory provision disallowing the cost of travelling between residence and place of business relates only tothetravelling from 20 his residence to his office atNicosia and notto thetravelling from the place of his posting to Lamaca, which is not the «τόπος επαγγέλματος», this being Nicosia.The travelling expenses are objectively incurred for the sole purpose and, therefore, wholly and exclusively for the production of the income and, therefore, 25 they are deductible. The sub judice decision suffers from misconception of fact and is contrary tolaw. Itis hereby annulled. The question of costs gavemesome concern.Having regard to allthecircumstancesof thecase, respondenttopay £50.-towards 30 applicant's costs. Sub judice decision annulled.Respondent to pay£50. -costs. 530