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 not acting in the cours eof trade, and second that since there was no repeat business, the profits were not annual in the sense to be understood in the Acts.
Held: The finding that he was acting in the course of trade was a finding of fact amply justified by the evidence before the Commissioners. Cave LC: ‘there are, no doubt, passages in the Act in which the word ‘annual’ or the word ‘yearly’ has an implication of recurrence; but one must have regard to the context in which the words are found, and, having regard to the context, I do not think that there is any such implication in the words ‘annual profits or gains’ as applying to the profits or gains arising in respect of a trade which are taxable under Schedule D of the Act. ‘
Lord Sumner: ‘With regard to the argument raised on the word ‘annual’, I would point out that the nature of the trade, as described in the Case Stated, was such as to show that there was at the outset every possibility of repeated trading operations and a considerable chance of their lasting over a protracted period; and I do not question that the word ‘annual’, in connection with the profits of that trade, would be satisfied by there being profits falling within the year of charge, upon which the system of the Income Tax Acts is based.’
Viscout Cave LC, Lords Atkinson, Shaw of Dumfermline, Sumner and Carson
(1926) 1 KB 550, 11 Tax Cas 297, [1927] AC 312
Bailii
Income Tax Act 1918 SchD
England and Wales
Citing:
At first instance – 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 . .
Appeal from – Martin v Lowry (HM Inspector of Taxes) CA 1926
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 . .
Lists of cited by and citing cases may be incomplete.
Income Tax
Updated: 05 December 2021; Ref: scu.235902