Brosnan v Mutual Enterprises Ltd

• Jurisdiction: Ireland
• Judgment Date: 08 July 1997
• Date: 08 July 1997
• Docket Number: [1994 No. 80R; S.C. No. 169 of 1995]
• Court: Supreme Court

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3956

HAMILTON

C.J.

-

BARRINGTON

J.

LYNCH

J.

THE

SUPREME

COURT

169/95

BETWEEN:

T.

G.

BROSNAN,

INSPECTOR

OF

TAXES

Appellant

and

MUTUAL

ENTERPRISES

LIMITED

Respondent

Judgment

delivered

on

the

8th

day

of

July

1997

by

Hamilton

C.J.

[per

Di

ssf

This

is

an

appeal

brought

by

T.G.

Brosnan,

Inspector

of

Taxes,

(hereinafter

referred

to

as

the

Appellant)

against

the

judgment

delivered

by

Mr.

Justice

Murphy

on

the

7th

day

of

April

1995

and

the

order

made

by

him

in

pursuance

thereof

on

that

date

whereby

he

answered

in

the

affirmative

the

question

of

law

submitted

for

consideration

by

the

High

Court

in

a

Case

Stated

dated

the

28th

day

of

June

1994

by

the

Circuit

Court Judge

for

the

Cork

Circuit

pursuant

to

the

provisions

of

Section

430

of

the

Income

Tax

Act,

1967

as

applied

to

Section

146

of

the

Corporation

Tax

Act,

1976

(2)

395

following

the

hearing

by

the

said

Circuit

Court

Judge

on

the

15th

day

of

May

1989

of

an

appeal

by

the

Respondent

herein,

Mutual

Enterprises

Limited,

(hereinafter

referred

to

as

the

Respondent)

against

a

decision

of

the

appeal

commissioner

made

on

the

28th

day

of

April

1988.

The

question

of

law,

which

had

been

submitted

for

the

decision

of

the

High

Court

was:-

“whether

upon

the

facts

proven

or

admitted

the

Circuit

Judge

was

correct

in

law

in

holding

that

the

Respondent

was

entitled

to

bring

into

account

in

computing

its

trading

profits

and

allowable

losses

for

the

purpose

of

corporation

tax,

the

amounts

of

the

losses

incurred

on

foreign

currency

exchange

rates

applicable

to

its

borrowing

notwithstanding

the

provisions

of

Section

61(e)

and

(f)

of

the

Income

Tax

Act,

1967.”

The

facts,

proven

or

admitted,

are

set

out

in

detail

in

the

Case

Stated

dated

the

28th

day

of

June

1994

and

in

view

of

the

issues

raised

in

this

appeal,

it

is

desirable

to

set

forth

in

the

course

of

the

judgment

the

entire

of

the

Case

Stated.

The

Case

Stated

provided

as

follows:-

“1,

The

matter

came

before

me

for

hearing

on

the

15th

day

of

May,

1989

on

appeal

by

way

of

rehearing

by

Mutual

Enterprises

(hereinafter

referred

to

as

the

Respondent)

under

the

provisions

of

Section

429,

(3)

-

3958

Income

Tax

Act,

1967,

as

applied

to

Corporation

Tax

by

Section

146,

Corporation

Tax

Act

1976,

against

a

decision

of

the

Appeal

Commissioner

made

on

the

28th

day

of

April

1988

in

relation

to

appeals

against

assessments

to

Corporation

Tax

made

by

the

Inspector

of

Taxes

(hereinafter

referred

to

as

the

Appellant)

for

the

periods,

profits

and

Corporation

Tax

as

set

out

hereunder:-

Period

Profits

Assessed

Corporation

Tax

Ended

31st

day

of

December

1981

£10,000

£4,500

3tst

day

of

December

1982

£10,000

£5,000

31st

day

of

December

1983

£12,000

£6,000

31st

day

of

December

1984

£12,000

£6,000

2.

The

sole

point

for

decision

by

me

was

whether

the

company

is

entitled

to

include

the

losses

on

foreign

currency

translation

in

computing

the

trading

profits/allowable

losses

for

Corporation

Tax

purposes.

3.

The

following

documents

were

admitted

in

evidence:-

(i)

Statement

of

Standard

Accounting

Practice

No.

20,

dated

April

1983;

(ii)

Allied

Irish

Investment

Bank

Ltd.’s

letter

of

loan

approval,

dated

23rd

January

1980;

ae

mao

ome

)

Audited

accounts

of

the

company

for

the

four

periods

(

ended

31.12.1981,

31.12.1982,

31.12.1983

and

31.12.1984