Alliance and Dublin Consumers' Gas Company v Davies

• Jurisdiction: Ireland
• Judgment Date: 30 March 1926
• Date: 30 March 1926
• Court: High Court (Irish Free State)

H. C.,

Alliance and Dublin Consumers' Gas Co

and

Davies

Deductions - Statutory company - Reserve fund - Realisation of investments - Loss incurred - Whether allowable deduction - Loss not arising out of company's trade - Alliance Dublin Gas Act, 1883 (46 47 Vict., c. cix), s. 32 - Income Tax Act, 1918 (8 9 Geo. V., c. 40), Sch. D, r. 3 (e) of Rules applicable to Cases I. and II.

The Alliance & Dublin Gas Act, 1883 (46 & 47 Vict., c. cix), fixed the standard prices to be charged by the Alliance Gas Company for gas, and provided that they might increase or diminish such standard prices subject to an increase or decrease in the standard rates of dividend as defined by the Act. The Act also provided that if in any year the amount of the standard rate of dividend should be increased by reason of a diminution of the standard price charged by the company, then, out of the divisible profits applicable to the payment of such increase, a reserve fund might be created. The company created a reserve fund, and suffered a loss in the realisation of an investment forming part of it, and, on an assessment to income tax, they claimed that this loss was one connected with or arising out of the trade carried on by them, and therefore allowable as a deduction under the Income Tax Act, 1918, Sch. D, r. 3 (e) of the Rules...