3 C.L.R. 1988 December30 [A.LOEOU,P.] ι INTHEMATTEROFARTICLE146 OFTHECONSTITUTION ATHINOULLATH.IERONIMIDES, Applicant. v. THEREPUBLICOFCYRPUS,THROUGH THECOMMISSIONEROFINCOME TAX, Respondent. ' (CaseNo. 344/85). 5 10 Taxation—CapitalGainsTax—Factfindingprocessregardingthevalueof the landon the material hate—Judicial controlof—Principlesapplicable— Review confined to,the evidence that was actuallybefore the respondent when the decision was taken—Therefore, evidence in theformofan expert'sreportmadeonbehalfof theapplicant,shouldbeignored, ifsuch re portwas notbefore therespondent—Thereport, however, hassignificance isdecidingmattersjustifyinginterference,such asmisconceptionoffact or laworabuseofpower. Having found that the valueplaced by the respondent to the land in question ason the 27.6.78wasreasonably open tohim, the,Courtdis missedtherecourse. , , . ,Recoursedismissed. *" Noorderas tocosts. • Casesreferredto: 15 · ' _ *,' Georghiadesv.TheRepublic
(1982)3;CLR.659; " Christofiaesv. TheRepublic(im) 3CLR.U54-, Smirti v. TheRepublic
(1988)3CLA. 1305. 2657 * .' .. * * '' Ieronimidesv.Republic
(1988)Recourse. Recourseagainsttheassesssmentofcapitalgainstaxleviedon the applicant on the gain from the disposal of the immovable property underReg.No.I.
- / . MavronicolaswithSt.leronymides,fortheapplicant. 5 Y.Lazarou, for therespondent. Cur. adv. vult. A.LOIZOU p. re£<J tjie following judgment. This is arecourseagainsttheassessmentofcapitalgainstaxwhichwasleviedanddeterminedonthegainfromthedisposaloftheimmovablepropertyoftheapplicantunderRegistrationNo.I. 1752plot No. 1708,described as a building site,of an areaof one evlek and2100sq.ft. Ihavetakenoyerthisrecourseonthe3rdFebruary 1988from acolleaguewhoretired. Onthe28thJune 1982theapplicantsoldthebuildingsitesubject-matterofthisrecourse.IntheDeclaration ofdisposalofImmovable Proberty (Form I.R. 401)? which she submitted tothe Respondent Commissioner, the applicant declared as saleproceedsthesumof£14,000anddeductedtherefrom asthebasevalueonthe27thJune 1978alsothesumof£14,000.-. The Respondent Commissioner accepted the amount of the saleproceedsbutrefused toaccept|hedeclaredmarketvalueof the 27thJune 1978,which hevalue*} at£9,500instead. Onthe basisofthemarketvalueof£9,500asat27thJune1978,theRespondentCommissionerraisedanassessmentonacapitalgainof 25 £4,500onthe30thJune, 1983whichwassenttotheApplicant Onthe7thJuly, 1983theApplicantlodgedanobjection,through herhusband,Mr.Theodorosleronymides,statingthatthemarket value of her property on the 27th June 1978 was more than £14,000.-. 2658 15 20 30 3CX.R. 5 Ieronimidesv.Republic A.LoizouP. TheRespondent Commissioner,after inviting theApplicant's husbandtohisoffice fordiscussionandhavingcarefully consideredthegroundsofobjectionrejected theApplicant'svaluationof themarketvalueof theproperty asonthe27thJune, 1978, and proceededwiththedeterminationoftheassessment TheRespondentCommissionercommunicated totheapplicant hisdulyreasoneddecisionbyletter datedthe28thDecember, 1984,(Appendix"A"),togetherwiththerelevantNoticeofCapitalGainsTax. Theapplicantfiled thepresentrecourseprayingthefollowing 10 relief: "A.Adeclaration thattheactand/ordecisionof theRespondenttoassessApplicanttocapitalgainstaxontheamountof £9,500isnullandvoid,andofnoeffect whatsoever. B.Adeclarationthatthetrue(taxable)valueisC£14,
- 15 C.Adeclarationthattheprovisionsofsection6ofTheCapital GainsTaxLaw 1980(LawNo.52of 1980)insofar asthey purporttotaxgainsaccruingbefore 1.8.1980arenullandvoid andofnoeffect whatsoeverasbeingcontraryto,orinconsistentwithArticle24
(3)oftheConstitution." 20 Thedisputetherefore betweenthepartiesrevolvesaroundone main issue, namely, thevalue of the subject property as atthe 27thJune 1978.Theapplicant alllegesthatthevalueoftheland asatthe27thJune 1978andasatthe28thJune 1982isthesame andthatthevaluationreliedonbytheRespondentCommissioner didnot'takeintoconsideration thefactors andpricesconcerning salesof similarproperties inthesameareaatthesametime,as well as other factors affecting the market value of the Land. Hence'hisdecision tovalue suchproperty at£9,500.-asatthe 27thJune, 1978iswrong. 25 30 Insupportofherallegationstheapplicantpfoduced'avaluation reportbyTh.leronymidesandAssociatesLtd.CharteredSurveyors,whichhercounseldescribedascontainingthetrue,realand 2659 A.Loizou P. leronimidesv.Republic
(1988)impartial assessment of themarketvalueofthesaidpropertyon 27th June, 1978andbywhichitisprovedasclaimedbytheapplicant that the assessment of theRespondent Commissioner is manifestly wrong.(Exhibit3). Itmaybementioned herethattheApplicantabandonedheral- 5 legation of the unconstitutionality of section 6 of the Capital GainsTaxLaw
- Counselfor theRespondentCommissionerontheotherhand hasurgedthatthevaluationonwhichhebasedhisdecision-Exhibit 1 -wasprepared byanexpertinthefieldof landvaluation, 10 namelyMr.Mateas,aqualified assessorandvaluerof landwho asitisevidentconducted athoroughsearchintoalltheelements andconsiderationsrelevanttothevalueofthelandandthatthere isnogroundjustifying anyinterference withhisdecisiontovalue thepropertyat£9,500-asatthe27thJune,
- 15 Thejurisdiction of theCourtincasesof taxreview isnodifferent from that in anyotherfieldofadministrative action.Itis confined toareviewofthelegalityoftheactionoftheAdministrationwithinthecompassoftheirauthority.Providedtheyoperatewithin theframework of theirpowers theAdministration is 20 thearbiterofthefact-finding process.Andsolongastheinquiry into thefactual background isadequateand thedecision isone reasonably opentothemtheCourtwillsustainitasavalidexercise of their powers (vide Georghiades v. Republic
(1982)3 C.L.R. 659). Theusefulness ofthevaluationsubmittedbytheapplicant,and which wasfor thefirst timebroughttolightinthecourseofthe presentproceedings,isastowhetherinappreciatingthefactsof thecase,therespondentCommissioneractedunderany.misconceptionoffactorlaworinabuseofpower,thatisincircumstan- ™ cesinwhichthisCourtwouldbejustified tointerferewithhisappreciationofthefactsorthedeterminationofthemerits.NotbeingbeforetheRespondentCommissionerwhenthesubjudicedecisionwasreached,itshouldotherwisebeignoredasareviewby 2660 25 3 C.L.R. Ieronimides v. Republic A.LoizouP. theCourtis confined totheevidence thatwas before theRespon dentCommissioneratthetimehereachedthe.sub-judice decision -videChristofides v. Republic
(1984)3 C.L.R. 1454 at 14591460. 5 ΙΟ Thusinthecase inhandthequestion whetherthedecision of the Respondent Commissioner was reasonably open to him should be answered by reference toMr.Mateas valuation, this being theonly evidence before theRespondentCommissionerat thematerialtimeas to thevalueof thelandas atthe27thJune 1978 andtestthatvaluation with thevaluationproducedonbehalf of theapplicantinordertoseeif therehasbeenasalready stateda groundtointerfere with theappreciationof facts inthelightofthe general principles of administrative law hereinabove setout. Moreoverthevaluationof therespondentsis supportedbythe reportproduced as exhibit 1which Iadopt andin which theva luerfor theRespondentCommissionergivesadetailed accountof themethodusedandthecomparablesaleswhichwerereliedupon inarrivingattheconclusion thatthevalueof thesubject property as on the 27th June 1978 was £9,500 thatis £1.66 cents per 2Q square foot. Alsothisreportconstitutes anindicationthatallthe factors which wererelevant tothevalueof theland weretaken intoconsiderationby Mr. Mateas. 15 25 ,, Ishould however stateatthisstagethatitisdesirable that such valuations are properly placed before theRespondentCommissioner when objections arelodged, or before any decision inre spect thereofis taken(RelevantinthisinstanceIconsiderittobe thecase of AngelikiSmirliv. Republic,
(1988)3 C.L.R. 1305 andtheauthoritiesthereinreferred to.) In thepresent instance there is norecord of what werethe grounds of objection raised by theapplicant's husband whoalso preparedthe,assessment inquestion butonemightbetempted to consider that his valuation was also part of the arguments ad vanced by himindealing with theobjection. 2661 A.Loizou P. Ieronimides v.Republic
(1988)Foralltheabovereasonstherecoursefails andisherebydismissed anthe subjudicedecision isconfirmed in whole.There willbehowevernoorderastocosts. Recoursedismissed. Noorderastocosts. 5 2662