The appellant purchased the entire stock of government surplus aircraft linen. He had another main business and had intended to resell it immediately. When that failed to promise a profit he set out to sell and sold the material over several months in many smaller transactions. He claimed not to have been in trade in this exercise, saying it was just one gambling exercise, and appeal a finding that he was in trade.
Held: the taxpayer’s approach was untenable: ‘The Appellant entered upon this separate and new trade, or business, or adventure, for the purpose of realising profits or gains in it, and even if his purchase was made under a single contract, the realisation of his profits, which were large, was accomplished by his setting up a trading organisation. ‘ He then said that these were not ‘annual profits’. As to this the system of Income tax was that the charge to tax was established annually by statute, and made no provision for taxation beyind that range: ‘the Acts contemplate and impose a tax for one year only.’ The argument failed; a casual profit arising from an isolated transaction in the course of the year was taxable in tha year.
Atkin LJ: ‘If one could adopt as a rigid canon of construction an assumption that in any statute the same word is always used with the same meaning, one’s task would perhaps be easier; but it is plain that the assumption is ill-founded, and particularly so in regard to the Income Tax Acts. We must have regard to the context. When the history of the Income Tax Acts is looked at, the meaning of the words in question becomes plain.’ and
‘I am inclined to accede to the argument that ‘annual’ often, perhaps usually, connotes recurrence, and that it is sometimes used with that connotation in the Income Tax Acts, on the other hand it sometimes means ‘of the year’, and is also used in that connotation in the Income Tax Acts. In the context in which it is used in this Schedule it appears to me to mean profits of the year of charge. In that view the question that arises in respect to them is not whether they are recurrent or capable of being recurrent. With that quality an Act imposing taxation for a year only may be considered to take little concern. The question is whether they can fairly be brought within the main purview of the Acts, which is to tax income, not capital, and whether, if they are profits in the sense of income, they arose within the year in respect of which the Legislature is exacting revenue. ‘
Judges:
Pollock MR, Atkin, LJ
Citations:
(1926) 1 KB 550
Statutes:
Jurisdiction:
England and Wales
Citing:
Appeal From – Martin v Lowry (HM Inspector of Taxes) KBD 15-Jun-1925
The taxpayer had other business, but purchased a substantial quantity of cloth and resold it. He said this was not by way of trade. The Revenue said that he had used all the standard trade practices, and it was taxable as such.
Held: The . .
Cited by:
Appeal from – Martin v Lowry (HM Inspector of Taxes) HL 7-Dec-1926
The taxpayer had purchased the entire war-surplus of aircraft cloth, expecting to sell it in one go at a profit. When the sale fell through, he sold it off, at a considerable profit, in a large number of smaller transactions. He argued that he was . .
Cited – FHR European Ventures Llp and Others v Cedar Capital Partners Llc SC 16-Jul-2014
Approprietary remedy against Fraudulent Agent
The Court was asked whether a bribe or secret commission received by an agent is held by the agent on trust for his principal, or whether the principal merely has a claim for equitable compensation in a sum equal to the value of the bribe or . .
Lists of cited by and citing cases may be incomplete.
Income Tax
Updated: 07 May 2022; Ref: scu.235900
