Cor. Kingdon & Ors V. The Receiver-General Of The Gambia (1944)

LawGlobal Hub Judgment Report – West African Court of Appeal

Income Tax Ordinance, 1940, s. 3 ; s. 11B and Order No. 13 of 1942 thereunder—Income derived from the Gambia—Exemptions-Contribution to approved fund, when not annual but special.

Facts

Company in the Gambia on a salary of £500 plus commission on profits, which (as stated in letters from the Company to him) was normally granted but could be withheld, as the Company thought fit. In 1942 he was granted a commission : £562—two-thirds thereof—was credited to his Provident Fund ” A ” account as a special contribution, the other third to his account on the Coast, according to rules previously made known to him—an arrangement to which by his conduct he must be regarded as agreeing. Under those rules his legal personal representative would on his death be entitled to receive the balance in his ” A ” account.

The Income Tax Ordinance, 1940 (as amended) provides in s. 3 that income tax shall be payable on income derived from the Gambia in respect of the items of income there specified, and in s.11 that a deduction shall be made of the annual contribution to an approved fund (which the above-mentioned fund was) up to one-sixth of the income, where the contribution is made pursuant to a statutory or contractual obligation under rules precluding the withdrawal of the contribution except upon the death of the contributor or the termination of his appointmeht.

The Receiver-General contended that the £562 in question was chargeable income within the terms of s. 3 and was not exempted by the terms of s. 11B. On Page’s behalf it was contended—

1. that the sum was not ” income ” within the meaning of section 3 ;
2. that if it was ” income “, it was not ,” accruing in, derived from, or received in, the Gambia ” ;
3. that in any case it was exempted, up to one-sixth of Page’s income, by the terms of s. 11B.

Held

(a) that the commission, when paid, was remuneration for employment, and the payment of two-thirds thereof into Page’s Provident Fund ” A ‘ Account must be regarded as a voluntary contribution, wherein, in view of his legal personal representative’s right to receive it on his death, he had a vested interest ; and that therefore it was ‘ income “, it being immaterial that he did not receive the sum and what he agreed to do with it.

(b) that being part of his remuneration for employment, the commission was income derived from the Gambia ;

(c) that the contribution, not being an annual one but special, did not C. L. Page come within the terms of the exemption under section 11 B.v.

There will be no order as to costs.