Boland’s Ltd v Davis (Inspector of Taxes)

• Judge: The President,O’Shaughnessy and Hanna.
• Judgment Date: 13 May 1925
• Court: High Court

Income tax, Sch D - discontinuance - distance trades - set-off for losses - ITA 1918 Sch D Cases I and II and miscellaneous rules.

The appellant company were formed to acquire and carry on the business of millers, bakers, corn dealers, etc, the milling being carried on in different premises from the various bakeries and restaurants owned by the company. The various separate staffs are controlled from the head office, which is at one of the bakeries, and separate accounts are kept of receipts and expenditure for the milling portion of the business but the general overhead charges of the whole business are not apportioned to the various activities, although during the period of flour control two-thirds of such charges were admitted by the controller as applicable to the milling.

About one-half of output of the mill in normal years was used in the bakeries and the remaining one-half sold.

In August 1922, milling was stopped and flour for use in the bakeries was purchased until some time in April 1923 when milling was resumed to supply these, and subsequently for sale.

The appellants appealed against assessments to income tax for the years 1921-22, 1922-23 and 1923-24 and claimed (a) to be assessed on the actual profits for 1922-23 of the milling on the ground of discontinuance, (b) that they were carrying on two distinct trades and entitled to a set-off from the profits of baking in respect of the loss on milling, and (c) alternatively, that if one trade only was carried on it had ceased, or through specific cause they had been deprived of their profits and gains.

The special commissioners found as facts that the company was only carrying on one trade, and it was not discontinued in August 1922.

Held, in the High Court, dismissing the appeal, with costs, that there was evidence to justify the commissioners’ findings.

Legislation

ITA 1918 Sch D Cases I and II, CTA 1976 s 25.

Case stated

Case stated under ITA 1918 s 149, by the Commissioners for the special purposes of the Income Tax Acts for the opinion of the High Court of Justice

1. At a meeting of the Commissioners for the special purposes of the Income Tax Acts held on 14 December 1923, at Dublin, for the purpose of hearing appeals, Bolands Ltd, (hereinafter referred to as “the company”) appealed against estimated assessments made upon it under ITA 1918 Sch D, for the years of assessment, 1921- 22, 1922-23 and 1923-24, in respect of the profits of its trade as millers and bakers.

2. The company was incorporated in the year 1888 with limited liability, to carry on the business of millers, bakers, corn dealers, and corn and flour merchants. A copy of the Articles of Association of the company is annexed hereto and forms part of this case.[Not included in present print]

3. The company’s trading included:

• (a) flour milling which was carried on in the company’s two flour mills at Ringsend Road, Dublin,
• (b) bread baking, which was...