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(1989)19S9 March IS [STY11ANIDES.J] 1 : IN THE MATTER Oi ARTICLE 14601 THE CONSTITUTION APOSTOLUS IG.VVriOUAND ANOTHER. Applicants. THE REPUBLIC 0Γ CYPRUS.THROUGH THE COMMISSIONER OF INCOME TAX. Respondents (OLSC Xo 145/84) Judicial control — Taxation — Assessment ol amount ol ta\ — Interference by Court — Principles applicable — Court docs not interfere il the decision was reasonably and propal) open to the respondent 5 Taxation — Assessment andcollection ol tn\cs — TheAssessment and Collection ol Ta\cs Laws. 1978-1979. sections 23
(1)and 200) — Commissioner ol income ta\ entitled to invoke pou as under section 23( I). whcne\cr hebona tideloims the \icw thaino assessment u,j> niised or the tux lc\ied is insiilhcieiu — The Commissioner is also 10 empowered undei section 20ό) to ma ease the object ol the tn\ ol a person, who tiled an objection, without icsorlmg to thepro\isions lor additional assessment ol section21 Taxation — Income Ta\ — Tiading in land, single transaction — 15 Matters that can be taken into consideration m order to determine issue whether transaction constitutes trading m land— The Income Ta\ Law.section 5(l)(
  1. a)and(
  2. h)The main issue in this ca.seis whether it was reasonably open to 2 0 the Commissioner of IncomeTax to find that the ditterencebetween the purchase price andthesale price by applicants of a held mPegia 346 3 C.L.R. Ignjtiou & \nother \. Republic is subject toincometax I heapplicants who aic husbandandwile acquitedapiece oi landof an extent ol lOacies in Pcgiaback in 1971 Theapplicant husband is an architect Theapplicant swife wasatthetime an απhostess Shedid also acqunc pieces ol land inanotherdeveloping at the time aiea of Cvprus \gios AmbroMOS IIwasestablished that hall thepurchase piice ol the land at Pegia was secured b\ loan fiom a bank Theland was soldb\ applicants at αmuch higher price than thepinchase piice ihc\ paidin 1979 Intheciieumstances theicspondem treatedthediltciencc between the twopiit.es as incomeliom ti ldmg Hencethis iccouisc Held indismissing the rccouise 1 Incases ιelating toassessment olincomelor purposes ol taxationthe Couit docs not intcilcie il thedecision wasicasonabh andpiopciK open tothe Commissioner ol IncomeTax 2 Section 21
(1)01 the \ssessment andCollectionol Iaxes I aws 19~S79 empoweis theDiieuoi toiaise additional assessments whcic\ei the onginal assessment was insuthcicnt \loico\ci section 20p) empoweis theDirector indealing with anobjection to mcieascthe object ol thetax without rcsoiunii toadditional assessment > Thelax in question was lewed under section 5(Ufa) and(h)olthe Income I ax I aw (then text appears atpage 1SSι 1heissueraistd in this case eonecins the natuicol thedillcicncc between thetwo piices and is a question ol mixed law andtact Tfic test is whethci the tiansaetion exhibits lealuics which gi\cittheehaiactci of a business deal 4 \ single iiansaetion laich atiiacts income tax but nc\eitheless the tiansaetion must beexamined objcemclv The ehaiactci ol theland in question the stale ol us development andhituie potential the income which it \iclds the mannei olthelinance ol the transaction the business knowledge of the lax pa\er orol hisassociates and the length of theowneiship ma\ indicate thecommcicial natuic ota transaction 5 Thebuiden ol piool is ontheapplicants 6 Inthis case theapplicants purchased a baiicn iock\ plot ol land 347 Ignatiou &Another v.Republic
(1989)abuttingthesea-shoreandsurroundedbyhali-Iand. Thelandthey purchased was notsuitable foragricultural, rural orother similar use or exploitation. It yielded no income and there wasno prospect ofyieldingany inthefuture. Itwassituatedata locality ready for development. Inan area where prices of land were 5 galloping. Half thepricewaspaid from aloan from abank.The applicant wife had purchased in 1972other non-income yielding immovables at another place of tourist development area at the other endof Cyprus, namely Agios Ambrosios. Inthelight of these facts, thesub judice decision was reasonably open to the 10 respondents. Recoursedismissed. ,Ύοorder as to costs. 15 Casesreferredto: P.G.G. Clift v. RepublicandAnother
(1965)3CLR. 2S5, Christides v. Republic
(1966)3CLR. 732. 20 Makridcs v. Republic (MinisterofFinance)
(1967)3CLR. 147, Georghiudcs v. Republic
(1982)3C.L.R. 659, Mungli v.Republic
(1983)3CLR. 52. 25 NadjiEruclisandAnotherv. Republic
(1984)3C.L.R. 604. RepublicandAnotherv. Frangos
(1965)3C.L.R.
  1. 30 Solomonides v. Republic (CommissionerofIncome Tax) (196S)3 C.L.R.
  2. Constannc Estates v. Republic
(1982)3C.L.R. S
  1. Ioannides v. Republic(19S5)3CLR.
  2. SavvasM. AgrotisLtd. v.Commissioner of IncomeTaxand Limassol LandInvestments Ltd. v.TheCommissionerofIncome Tax. 22C.L.R. 40 27, 34S 35 3 C.L.R. Ignatiou &Another v. Republic Jones v. Lccmmg 99K.D.
  3. InEdwards(InspectorofTaxes) v.BairstowandAnother [1955]3All E.R. 4S, 5 CaJifornian Copper Syndicate (Limited and Reduced) v. Harris,5 Tax Cases, p. 159, 10 Droussiotisv.Republic(MinisterofFinanceandAnother)
(1967)3 CLR. 15. Johnston (Inspectorof Taxes)v.Heath[1970)1W.L.R. 1567, Greenbcrgv.IRC11971}3All E.R. 136(H.L). 15 River EstatesLtd.v.Republic
(1986)3 CLR. 2575, loannides v. Republic(Councilof Ministersand Others)
(1972)3 C.L.R. 318, 20 Mikelhdou v.Republic
(1981)3C.L.R.
  1. Recourse. 25 Recourse against the validity of the decision of the respondent on theobjection for the income tax assessments for the years 1979-
  2. T.Papadopoulos, for theApplicants. 30 A. Evangelou, Senior Counsel of the Republic, for the Respondents. Cur. adv.vult. 35 STYLIANIDES. J. read the following judgment. By this recourse the applicants challenge the validity of the decision of the respondent - Commissioner of income Tax - on the objection for the income tax assessments for the years 197940
  3. Applicants complain that the Respondent erroneously 349 Stylianides, J. Ignatiou & Another v. Republic
(1989)treated as part of their relevant taxable income the difference between the purchase priceandthesaleprice of a piece of land at Peyia - Paphos. The salient facts of thecase are as follows:- 5 The applicants are husband and wife. Applicant No. 1- the husband -of Paphos, duringthematerial times,derived income from his profession as draughtsman. He failed to submit his returns of income for the years 1977 - 1981. The Respondent 10 raised assessments from time to time, in accordance with section 13
(3)of the Assessment and Collection of Taxes Law, 1978 (Law No. 4/78). as amended by Laws 23/78 and 41/79. which provides:15 "
(3)Where a person has not delivered a return andthe Director isof theopinionthatsuchperson isliable topay tax imposed on the object of the tax he may, according to the best of his judgment, determine the object of the tax and assess such person according to the nature andextent of his 20 business:" The husbandobjected totheassessment raised upon him for the year of assessment
  1. in ordertoenable the Respondent to examine his objection, aStatementof Assets and Liabilities, 25 as at 1stJanuary, 1979 and31st December
  2. preparedby his accountant -Mr.E.Neophytou,signed attheendthereof by the husband,was submitted on26th November,
  3. In the Statementwe read:- 30 "Ακίνητηπεριουσία 1/2 μετάτηςσυζύγου 10σκάλεςχωρά­ φι εις Πέγεια αο. εγγρ. 41048 εις τιμή κτήσεως 1973 ΛΚ 16,700.-." 35 In the letter of the accountant,to which theStatements were attached, it was stated that the field at Peyia was sold to Armonia Estates Ltd..in 1979 at £95,000.-, and that until 31st December, 1981, Armonia Estates Ltd. owed to his client £31,
  4. Upon inquiry it was revealed that the said field was 350 40 3 C.L.R. Ignatiou &Another v. Republic Stylianides, J. transferred in the name of the applicants by purchase on 15th October, 1973.The purchase price declared at the D.L.O was £8,000.- andthe transfer fees paid£400.-. 5 It was established that in 1972 the wife purchased at Ayios Amvrosios, Kyrenia district, a field of one donum in extent, Registration No.2998,at£728.-andahouseatthesamevillage, Registration No.2999,at£312.-. 10 In 1973immovablessituateinAnavargos-hernativevillage were transferred bygift inher name. After the sale of the field at Peyia, both the husband and the wife purchased immovables at Paphos,Anavargos and Peyia. 15 During meetings with theOfficer examining his income tax liability the husband said and reiterated that the field at Peyia was purchased in 1973 after his marriage at £8,000.-. The purchase price was paid from the savings of his wife and £4,000.-from aloan contracted with the Bank of Cyprus,which 20 was paid off from remittances from abroad, where he was working in 1974 and
  5. After taking into consideration all the facts and reasons pertaining to the purchase and sale of the said plot of land at 25 Peyia. the Respondent decided that the transaction embarked upon by applicants wasan adventure in the nature of trade and the profit realized was taxable. He communicated his such decision to applicants by areasoned letter of 1stJuly, 1983and sent to them relevant Notices of Assessments. 30 Theapplicantsdisputedtheassessmentsmadeupon them and by notice of objection in writing, submitted by their new accountants Savvides, Siakallis and Savvides on 29th August, 1983, applied for review and revision of the assessments. The 35 ground of their objection wasthat thegain from the sale of the field under Registration No. 4104S at Peyia should not be considered as taxable. The object of the purchase of the field was not resale but development and relevant steps were taken to that end. 40 As no agreement was reached, the Respondent proceeded undersection 20
(5)and determined the amount of the object of 351 Stylianides, J. Ignatiou &Another v. Republic
(1989)the tax, on the basis of the evidence available to him, and notified theapplicants accordingly by letter dated 10th January, 1984. Relevant notices of tax payable weresent. The material part of theletter of 10thJanuary, 1984,reads:5 "Αναφέρομαι στις ενστάσειςπουέχετευποβάλειγιατις φορολογίες του εισοδήματος σας για τα φορολογικά έτη 1979 ως 1982 καισαςπληροφορώως ακολούθως: α) Η υπόθεσησαςέχει εξετασθεί σεβάθοςκαιέκτασηκα- 10 τά τις διάφορες συνεντεύξεις που είχε ο σύζυγος σας και οελεγκτής σαςμετονΑρχιφοροθέτηΠάφου. β) Μετάαπόαναθεώρηση της όλης υποθέσεως σας, έχω αποφασίσει με βάσηταστοιχεία που έχω στη διάθεση 15 μουότι το κέρδος πουέχει προκύψειαπό την πώληση του μεριδίου σας στο χωράφι με αριθμό εγγραφής 41048 στη Πέγεια αποτελεί εισόδημα που υπόκειται στις πρόνοιες των Αρθρων 5
(1)(α)ή5
(1)(η) των Περί Φορολογίας του Εισοδήματος Νόμων του 1961 ως 20 19S
  1. Οι κυριώτεροι λόγοι γιατηναπόφασημου αυτή αναφέρονται στην παράγραφο 2 της επιστολής μου ημερομηνίας 1 Ιουλίου 1983 η οποία έχει αποσταλεί στο σύζυγοσας.Ουπολογισμόςτουκέρδουςαναφέρε­ ται στηνπαράγραφο3τηςεπιστολήςεκείνης." 25 This determination, therefore, should be read together with the letter of 1st July,
  2. (See Appendices A and Β to the recourse.). 30 The assessments were raised under sections 5
(1)and
(6)of the Income Tax Laws 1961 - 1963 and sections 3, 13
(3)and 23
(1)of the Assessment and Collection of Taxes Laws
  1. 35 Theapplicants beingaggrievedbytheassessment made upon them filed this recourse. Thegrounds on which it isbased are:40
  2. The Respondent was precluded from increasing the taxable income under section 23 or 20
(5)of the 352 3C.L.R. Ignatiou &\nother v.Republic Stylianides,J. Assessment and Collection ofTaxes Laws 1978-1979. 5 10 2 The Respondent erroneously interpreted and applied the Income Tax Legislation relating to the nature and character of the profit realized from the disposition of their immovable 3 The Respondent laboured under misconception of fact and/or failed tocarry out dueinquiry into the conditions pertaining to taxability of applicants and the sale of the land. 4 Thesubjudicedecisionisnot dulyreasoned, itisarbitrary and wastaken inabuse andexcess of power 15 It is well settled that, in a recourse under Article 146of the Constitution against an assessment, the Court will not interfere with the sub judice decision of the Income Tax Authorities if it isoftheopinion thatsuch decision wasreasonably and properly 20 open to them on thebasisof the correct facts andin thelightof the correct application ol therelevant legislation and principles of law - (see P.G.G. Clift and The Republic of Cyprus through (a) The Minister of Finance, (b) The Commissioner of Income Tax
(1965)3CLR.285, Christos 25 Christides and The Republic of Cyprus, through The Director of Inland Revenue Department of the Ministry of Finance
(1966)3 CLR 732; Rallis Makrides v. Republic (Minister of Finance)
(1967)3 CLR. 147. Georghiades v. Republic (19S2) 3 CL R 659; Mangli v. Republic
(1983)3 30 CLR 52, HadjiEraclis and Another v. Republic
(1984)3 CLR 604) The applicant - husband tailed to submit returns of income for theyears 1977- 1981andassessments wereoriginally raised 35 by the Respondent under section 13
(3)of the Assessment and Collection of Taxes Laws. 1978- 1979 He objected Under section 23
(1)the Respondent has power to raise new oradditional assessmentswhenitappearstohimthat ataxpayer 40 was not assessed at all or was under-assessed The power conferred under section 23 may be exercised within six years after the end of the year of assessment Under paragraph 2 of 353 Stylianides, J. Ignatiou &Another v. Republic
(1989)section 23,where any person has been guilty of fraud or wilful default, the time-limit of thesix years mentioned in sub-section
(1)isincreased to twelve years. The only limitation to the exercise of these powers is the time 5 to which Ihave referred. TheRespondent isentitledtoinvokehispowersundersection 23
(1),whenever he,bonafide,forms theviewthat no assessment was raised or the tax levied is insufficient - The Republic of 10 Cyprus, through
  1. TheAttorney-General,
  2. The Ministry of Finance through The Director of the Department of Inland Revenue, and loannis Chr. Frangos
(1965)3 C.L.R. 641; Dr. Solon Solomonides v.Republic (Commissioner of Income Tax)
(1968)3 C.L.R. 105; Constanne Estates v. 15 Republic
(1982)3C.L.R. 859; loannides v.Republic
(1985)3 C.L.R. 1801). The Statement of Assets and Liabilities submitted in November, 1982. served as a springboard to the inquiry that 20 culminated in the assessments. It is noteworthy that under section 20
(5)of Law 4/7S, the Director is empowered to determine the amount of the object of the tax of the person objecting at an amount higher than the 25 taxation under objection. The proviso to sub-section
(5)of section 20. 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 30 objection, without resorting to the provisions of section 23 for additional assessment. The aforesaid dispose of the first ground. 35 Themain question thatfallstobedecidediswhetherthegains made out of the difference between the cost of acquisition and the net proceeds of the sale of the field at Peyia, was rightly treated as part of the taxable income of the applicants, as constituting gains or profits from trading in land within the 40 meaning of sub-section
(1)(a)or (h)ofsection 5. 354 3 C.L.R. Ignatiou & Another v. Republic Stylianides, J. Section 5
(1)(
  1. a)and (
  2. h)of the Income Tax Law reads as follows:5 10 15 "5.-
(1)Taxshall,subject totheprovisionsofthisLaw,be payable at the rate or rates specified hereafter for each year of assessment upon the income of any person accruing in, derived from, orreceived intheRepublic in respect of(a) gains or profits from any trade, business, profession or vocation, for whatever period of time such trade, business profession or vocation may have been carried on or exercised;" '"(h)any annual profit or gain not falling under any of the foregoing paragraphs." The expression ''trade" shall include every manufacture or adventure or concern inthe nature oftrade -(section 5
(2)(f)). 20 The issue raised is one of mixed question of law and fact, which has to be decided in the light of the panicular circumstances of each case -(Savvas M. Agrotis Ltd. v. The Commissioner of Income Tax and Limassol Land 25 Investments Ltd. v.The Commissioner of Income Tax.22 C.L.R., 27,at p.30:Jones v.Leeming99 K.B.318). In Edwards (Inspector of Taxes) v. Bairstow and Another [1955]3All E.R..48.Viscount Simondssaid at p. 54:30 35 40 "To say that a transaction is.or is not, an adventure in the natureoftradeistosaythatithasorhasnot,thecharacteristics whichdistinguishsuchanadventure. Butitisaquestionoflaw, not of fact, what are those characteristics, or in other words, what the statutory language means. It follows that the inference can only be regarded as an inference of fact if it is assumed that the tribunal which makes it isrightly directedin law what the characteristics are and that, I think, is the assumption thatis made.Itisaquestion oflawwhatismurder; a jury finding as a fact that murder has been committed has been directed onthelawandactsunderthat direction". 355 Stylianides, J. Ignatiou &Another v. Republic
(1989)Eachcasemustbeconsideredaccordingtoitsownfacts. The question to be determined being - isthe sum of gain that has beenmadeamereenhancement ofvaluebyrealizingasecurity, orisitagainmadeinanoperationofbusinessincarryingouta scheme for profit making - (CalifornianCopperSyndicate 5 (Limited and Reduced) v. Harris, 5 Tax Cases, p. 159; Yiannakis S. Droussiotis v. Republic(MinisterofFinance and Another)
(1967)3 C.L.R. 15; Rallis Makhdes v. Republic (Minister of Finance); Georghiades v.Republic; HadjiEraclisandAnother v. Republic(supra).). 10 The test is whether the transaction exhibits features which give it the character of a business deal. Though a single transaction rarely attracts incometax,thetransaction mustbe examined objectively. InPinson'sRevenue Law,6thedition, p.24,weread:- "Itis ingeneralmoreeasytoholdthatasingletransactionentered intobyanindividualinthelineofhisowntrade(althoughnot pan and parcel of his ordinary business) isan adventure in 20 the nature of trade than to hold that a transaction entered into by an individual outside the line of his own trade or occupation isanadventureinthenatureoftrade." Thesaying in Agrotis caseby Hallinan.C.J.about the pan 25 that real estates played intheeconomiclife of Cyprusandthat almost the main and sole field for investment wasimmovable propeny, has after thelapseof overthiny yearsbecome ahalf truth. In view ofthedevelopment ofthecountry,especiallyin tourist areas, and the galloping of prices of land, land with 30 developing prospects has become a commodity of trade Speculation in land has become an incident of common occurence. Indecidingwhetheracertainactivityconstitutestrading,the 35 following are relevant:Thecharacter ofthelandpurchased,itsstate ofdevelopment andfuture potential,aswellastheincomeityieldsatthetime of purchase or is likely to yield in future. Where the land is 40 undeveloped andthepurchaser cannot bedeemedto look toits income, present or future, asan incentive for entering intothe 356 15 3 C.L.R. 5 10 15 20 25 Ignatiou &Another v. Republic Stylianides,J. transaction,buttoitsfuture potentialasanasset,onemaydiscern anintention totradewithit, speculating therebyintherealization of profit from asaleinfuture. Themannerof thefinance ofthe transaction. An investor who has funds immediately available maybeassumedtosubstituteapieceoflandforanenhancedbank account as a more durable asset. This cannotbe said to bethe case where the element of speculation in the transaction is present. The business knowledge of the taxpayer or of his associates may indicatethecommercial natureof atransaction. The length of the ownership is, also, a factor in some cases. Intention totrademay begathered from agreat variety of facts and circumstances. The frequency of a transaction or other transactionsare anindicationoftrading, butasoletransactionis not always excluded from the doing a trading activity or adventureinthenatureoftrade. Ifothercriteriaaresatisfiedand it is reasonably open to find that a sole transaction is not an investment,but abusiness deal, atrading activity oradventurein thenatureof trade,thefact thatitisa single transaction is irrelevant, (Georghiades v. Republic (supra); Johnston (Inspector of Taxes) v. Heath [1970] 1 W.L.R. 1567; Greenberg v. IRC [1971] 3 All E.R. 136 (H.L.); Edwards (Inspector of Taxes)v.Bairstow and Another [1955]3 All E.R. 48;RiverEstatesLtd.v.Republic
(1986)3C.L.R.2575). The initial burden of proof is on the applicants in order to satisfy theCounthatthesubjudice decision is faulty. The grounds on which the decision of the Respondent was based areset outintheletterof 1stJuly, 1983, therelevant pan 30 of which reads asfollows:- 35 40 "2. Σαςπληροφορώότι μετάαπόπροσεχτική μελέτη τουθέματοςπουέχει πρσ/ύψει μετηνπώλησητου χωρα­ φιού αρ. εγγραφής 41048στηΠέγειακαιαφού έλαβα υπ' όψη όλεςτιςπαραστάσειςκαιεπεξηγήσειςπουέχετεκάμει και όλαταπεριστατικά τηςυποθέσεωςσαςέχωαποφασί­ σει ότι τοκέρδοςπουέχειπροκύψειαπό τηνπώληση του χωραφιού σαςυπόκειταισεφορολογίαμεβάση ταάρθρα 5
(1)(α) ή 5
(1)(η) των Περί φορολογίας τουΕισοδήματος Νόμωντου1961ως 1981.Οικυριώτεροιλόγοιστουςοποί­ ους έχωβασίσειτηναπόφασημουείναιοιακόλουθοι:357 Stylianides,J. Ignatiou & Another v. Republic
(1989)α) Αφορά υπόθεσηαγοράςκαιπωλήσεως. β) Οκυριώτερος σκοπός τηςαγοράςήτανημεταπώληση καιπραγματοποίησηκέρδους. 5 γ) Τοχωράφιδενέχειαγορασθείγιασκοπούςπαραγωγής εισοδήματος ή για τη χρησιμοποίηση του ως πάγιο ενεργητικό οποιασδήποτεεπιχειρήσεως καιδενέχειεν πάση περιπτώσει χρησιμοποιηθεί για οποιοδήποτε σκοπό. 10 δ) Τοχωράφιβρίσκεταισεπεριοχήπουπαρατηρειτο γρή­ γορη αύξηση στις αγοραίες αξίες και υπήρχε ζήτηση από πολλούς αγοραστέςκαιαπό πρόσωπαπου ενδιαφέροντο για ανάπτυξηγης, ιδιαίτεραλόγω τηςγνώσε- 15 ωςότιηπεριοχήήτανσετουριστικήζώνη,καιτογεγο­ νός ότι βρισκότανστηπαραλίαη αύξησητηςαξίαςτου μέχρι τηςμεταπωλήσεως τουθαήτοπολύμεγάλη. ε) Το χωράφι αγοράσθηκε με δάνειο και δεν μπορώ να 20 αποδεχθώ τον ισχυρισμό σας ότι είχε αγορασθεί για επένδυση των χρημάτων που είχατε στη διάθεση σας που εν πάση περιπτώσει δεν αποτελεί αποφασιστικό παράγονταγιατηνλήψηαποφάσεωςαντοκέρδοςυπό­ κειται σεφορολογίαή όχι. 25 ζ) Εσείς ή μέσωτηςσυζύγουσαςέχετεαγοράσεικαιάλλα δύο κτήματαστον ΑγιοΑμβρόσιο Κυρήνειας κατάτο έτος 1972 πουήτανπάλιΤουριστικήπεριοχήή περιοχή πουπαρατηρειτογρήγορηανάπτυξηκαιπραγματοποι- 30 ησηπολλού κέρδουςαπότηναγοραπωλησία γης. η) Το επάγγελμα σας ωςτεχνικού σε γραφεία αρχιτεκτό­ νων, μηχανικών είναι συναφές με το επάγγελμαπρο­ σώπων πουασχολούνται μετην ανάπτυξηγηςκαιπα- 35 ρέχει μεγάλες ευκαιρίες όσον αφοράγνώσεις για πε­ ριοχές που βρίσκονται υπό ανάπτυξη γης ήπουπρό­ κειταιναέχουν προοπτικέςσυντόμουαναπτύξεως. θ) Ητοποθέτησητωνχρημάτωνπουέχετεεισπράξειαπότην 40 πώληση τουχωραφιού έγινεγιααγοράγηςγιασκοπούς αναπτύξεωςκαιπωλήσεωςγιαπραγματοποίησηκέρδους. 358 3 C.L.R. Ignatiou &Another v. Republic Stylianides, J. 3. Toκέρδοςπουέχει προκύψειαπό τηνπώλησητου χω­ ραφιούστηνΠέγειαέχειυπολογισθείωςεξής:5 10 Τιμή πωλήσεωςστις 1.12.79 Μείον: Τιμήαγοράς και Μεταβιβαστικά Προμήθειεςπληρωθείσες καιδικηγορικά Κέρδος £95,000 £8,400 1,700 10,100 £84,900 With regard tomisconception offact itiscommonplacethat failure to make a due inquiry causing lack of knowledge of 15 material facts amounts to misconception of fact (Constantinos Ioannides v. Republic{Council of Ministers and Others)
(1972)3 C.L.R. 318; Mikellidou v. Republic
(1981)3C.L.R.461). A misconception as tofacts may consist of either the taking into account of non-existing facts or the 20 non-takingintoaccountofexistingfacts -(ChristosChristides and The Republic of Cyprus, through The Director of Inland Revenue Department of the Ministry of Finance (supra); The Judicial Control of Discretionary Powers by Economou, 1965,p.243). 25 Thefollowingparticulars ofthealleged misconception of fact weregivenintheaddress ofcounsel:30 35 40 (a)Applicant 2 purchased the field in question by written contracton4thOctober,
  1. Thecontractwas filedin theDeclarationofSale2647/
  2. Applicant 2 purchased it as aninvestment as part ofher "dower" incontemplationof hermarriage. This applicant was bom andbrought up atAnavargos Paphos.ShewaslivingatNicosia,shebeing employed as air hostess. (b)Applicant 1,who comes from Simou -Paphos, was in England. Heengaged toapplicant 2 on20th May,
  3. Their marriage was celebrated on 3rd September,
  4. Thetransfer was effected later onin
  5. 359 Stylianides, J. Ignatiou & Another v.Republic
(1989)(c)Theyintendedtodevelopthelandfortouristbusinessand on 19th February, 1977, a letter was addressed to the District Officer of Paphos, complaining for the noninclusion ofitinthetouristzone. 5 (d)Thepaymentofthepurchasepricewasmade:£2,500.-on signing of the contract and for the contribution of the applicant - husband £4,000.- loan contracted with the Bank ofCyprus. 10 TheRespondentcarriedoutinquiry. Theapplicant-husband wasinterviewed anumberoftimes. Hegavethe information. The applicants in forms filed and signed stated that they purchasedtheproperty in 1973 -(seeform I.R.302andp.3 of an undated form about the properties sold from 1st January, 15 1972,to 31stAugust,1981). The objection was determined and the sub judice decision wastaken on thebasisoftheevidencebefore the Respondent. Any allegations inconsistent or contrary to the evidence 20 available to the Respondent at the material time cannot be consideredbythisCourt. Theapplicantshadampleopportunity toplacetheiraforesaid allegationsbefore theRespondent. The alleged particulars of misconception were facts within their exclusiveknowledge. Thesubjudicedecisionisnottaintedwith 25 misconception of fact. Ihavegivendueconsiderationtothefactsandcircumstances ofthecase. Thecharacterofthelandpurchased-itisabarren, rockyplotoflandabuttingtheseashoreandsurroundedbyhali- 30 land,whichwasnot suitablefor anyagricultural,rural or other similaruseorexploitation -(see,inthisrespect,thepetition to the District Officer, dated 19th February, 1977,signed by the applicant -husband). It yieldedno income andthere wasno prospect ofyieldinganyinthefuture. Itwassituated,however, 35 atalocalityreadyfor development. Intheareathepriceswere galloping. Itisnotinanywaydisputedthathalfofthepurchase price-£4,000.-waspaidfromaloanobtainedfromabank. The applicants'nativevillagesareAnavargos andSimou-Paphos, thoughatthematerialtimetheonewasatNicosiaasairhostess 40 andtheotheranarchitectwhoreturnedfromhisstudiesabroad. The applicant - wife in 1972 purchased non-income yielding 360 3 C.L.R. Ignatiou &Another v.Republic Stylianides, J. immovablesat anotherplaceoftourist development, at another end of this Island -AyiosAmvrosios. The aforesaid, bythemselves,wouldsuffice, for a reasonable 5 man to reach the conclusion that the purchase was neither an investment nor a "dower". The application to the District Officer was for the enhancement of the price,asno other step, whatsoever, was taken for the development or for the tourist business alleged.Theactsdonewere:purchaseandultimatesale. 10 The occupation of the air hostess and the architect and the knowledge andexperiencewhich onegains insuchcapacities,is a very relevant factor. Having given thematter dueconsideration, inthelight ofall 15 the material before theCourt andthelaw,asexpounded earlier on in this Judgment, Ihave reached the conclusion that the sub judice decision is not the product of misconception of fact or law; the Respondent carried out due inquiry. The sub judice decision is dulyreasoned andit was,in all the circumstances of 20 the case,reasonably open tothe Respondent. The recourse ishereby dismissed. The sub judice decision is confirmed. 25 Imake no order astocosts. Recourse dismissed. No orderas tocosts. 361

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AI explanation based on the official legal text. Indicative, not a substitute for legal advice.