Nanik G Kripalani v. Minister of National Revenue, [1978] CTC 2247, 78 DTC 1203

The Chairman:—This is the appeal of Nanik G Kripalani from an assessment in respect of the 1973 and 1974 taxation years.

The issue is whether the appellant is entitled to exemptions of $1,400 in 1973 and $1,492 in 1974 for the support of non-resident dependants.

Facts

The appellant’s daughter Anita Kripalani, presently 11 years old, lives with the appellant’s wife’s sister Veena G Jhangiani in Bombay, India. Also living in Bombay, but not with Veena G Jhangiani is the appellant’s brother-in-law Khubchand Sitaldas. Both Veena G Jhangiani and Khubchand Sitaldas are elderly and were described as infirm on form T1E-NR (attached to notice of appeal). It is therein alleged that none of the above dependants have any other source of support.

Contentions

The appellant, representing himself, contends that he has financially supported the above-mentioned dependants for several years. Prior to 1973 the payments were effected by means of a foreign exchange agent and the necessary vouchers were available and the appropriate deductions were allowed by the Department of National Revenue.

In 1973 and in 1974, however, the appellant alleged that owing to political difficulties in India he could no longer use the foreign exchange agent to forward money to the said dependants and, other than vouchers in the amount of $512 paid in 1973, other receipts were impossible to obtain.

The appellant contends that he contributed more to the support of the dependants in 1973 and 1974 than the maximum exemption claimed in those years.

Counsel for the respondent properly pointed out that the allowance referred to in paragraph 109(1)(d) of the Income Tax Act, SC 1970- 71-72, c 63, as amended, is applicable only if Anita was wholly dependent on the appellant and that the appellant did not satisfy the onus of proving that his daughter was wholly dependent on him.

Counsel for the respondent also referred to paragraph 109(1)(f) of the Income Tax Act and submitted that even though the respondent admits that Veena Jhangiani and Khubchand Sitaldas were aged and infirm, only those amounts which were actually paid for their support are deductible.

The appellant was unable to substantiate any payment in 1974. In 1973 he substantiated the payment of only $512 which was allowed by the respondent.

Finding of Facts

We are therefore faced with two questions: (a) whether Anita is wholly dependent on the appellant; (b) what amount, if any, the appellant contributed to the support of his sister-in-law and his brother-in-law. The evidence at the hearing and in the pleadings is to the effect that Anita, the appellant’s child, has been living in India with her aged and infirm aunt since 1966 and that the appellant contributed to their support since that time. The respondent admits that Anita is the appellant’s daughter and that the appellant’s sister- in-law, as well as the appellant’s brother-in-law, are infirm and are over 60 years of age.

Subsequent to 1973, because of political difficulties in India and restrictions on the use of foreign money, the appellant could not send money to India and claims that in that year he went to India and gave them the necessary money. In 1974 the payments were allegedly made by the sale of an insurance policy which the appellant had in Bombay for some 30 years and the surrender value was about Canadian $1,250.

Exhibit R-1 reads as follows:

BOMBAY—INDIA

DATE: 13-5-76

TO WHOM IT MAY CONCERN

This is to certify that Mrs Savitri N Kripalani living in Canada at 7, Spruce Court, Marthon Ontario-Canada, is my Sister and her daughter Anita age 9 is staying with me in Bombay. Mrs Savitri N Kripalani has

supported Anita and myself for many years and Continues: to do so regularly.

During 1973-1974 and 1975 Mrs Savitri N Kripalani gave or sent us money over Five Hundred Dollers each (Canadian) or In Indian Rupees per year for support of each of us.

I or Anita have no other income from any other source.

(signed) V G Jhangiani

VEENA JHANGIANI

MAITRI COLONEY,

SION TROMBAY ROAD,

BOMBAY-71 (INDIA)

Exhibit R-2 reads as follows:

TO WHOM IT MAY CONCERN

This is to certify that I have received on behalf of Mr N G Kripalani the sum of Rupees Eight thousand one hundred fifty and paise twenty only (Rs 8150-20) from the Life Insurance Corporation of India.

(signed) G H Jhangiani

(G H JHANGIANI)

In my opinion, these exhibits have very little, if any, probative value and the issue must be decided largely on the credibility of the witness.

In that respect, if as claimed by the appellant he has sent money to India through a foreign exchange agent for several years, he must have been aware of the necessity of producing the necessary vouchers of such payments before the deductions could be allowed. Admitting the difficulty or the embarrassment of asking for receipts for the moneys paid to the dependants (notwithstanding that letters to that effect were evidently asked for and received, Exhibits R-1 and R-2), there should have been no compunction in obtaining from the insurance company some document confirming that the appellant did have an insurance policy in India, that it was surrendered for cash value and that the proceeds were paid to Mr Sitaldas in 1974. The appellant produced no acceptable evidence to that effect.

In my opinion, based on the evidence given at the hearing, it is very strange indeed that the appellant would leave his daughter in India for several years with an aged infirm aunt who, according to the appellant’s own testimony, has no source of revenue whatever other than the money he might occasionally send her.

The appellant, who admitted his obligation to do so, did not establish to the satisfaction of the Board that his daughter Anita was wholly dependent on him as required by paragraph 109(1)(d) of the Income Tax Act before the maximum deduction in 1973 and 1974 could be allowed. Nor did the appellant establish that he contributed more than $512 in 1973 which was allowed toward the support of his sister-in-law and brother-in-law in that year. The appellant produced no acceptable evidence that he made any contribution to the support of his sister- in-law or brother-in-law in 1974 as required by paragraph 109(1)(f) of the Income Tax Act.

Under the circumstances of this appeal, the Board has no alternative but to dismiss the appeal.

The appeal is therefore dismissed.

Appeal dismissed.