O'Grady v Roscommon Race Committee
| Jurisdiction | Ireland |
| Judge | Miss Justice Carroll |
| Judgment Date | 01 January 1993 |
| Neutral Citation | 1993 WJSC-HC 1218 |
| Court | High Court |
| Docket Number | [1991 No. 1281R],No. 1281R/1991 |
| Date | 01 January 1993 |
1993 WJSC-HC 1218
THE HIGH COURT
BETWEEN
AND
Citations:
INCOME TAX ACT 1967 S430
INCOME TAX ACT 1967 S241
INCOME TAX ACT 1967 S61
LAWRIE V COMMISSIONERS OF INLAND REVENUE 34 TC 20
BROWN V BURNLEY FOOTBALL & ATHLETIC CO LTD 1980 STC 424
DIXON V FITCHS GARAGE LTD 1975 STC 480
O CULACHAIN V MCMULLAN BROS LTD 1991 1 IR 363
COOKE V BEACH STATION CARAVANS LTD 49 TC 514
Synopsis:
REVENUE
Income tax
Assessment - Profits - Computation - Expenses - Deduction - Allowances - Race course - Viewing stand - Renovation - Repairs - Capital expenditure - Allowances for expenditure on plant - Income Tax Act, 1967, ss. 61, 421 - (1991/1281 R - Carroll J. - 6/11/92) - [1993] 1 I.R. 511
|O'Grady v. Roscommon Race Committee|
WORDS AND PHRASES
"Plant"
Income tax - Assessment - Profits - Computation - Expenses - Deduction - Allowances - Race course - Viewing stand - Renovation - Repairs - Capital expenditure - Allowances for expenditure on plant - (1991/1281 R - Carroll J. - 6/11/92) - [1993] 1 I.R. 511
|O'Grady v. Roscommon Race Committee|
Judgment of Miss Justice Carroll delivered the 6th day of November 1992.
This is a Case Stated for the opinion of the High Court pursuant to Section 430 of the Income Tax Act 1967. The matter at issue before the learned Circuit Judge was whether the expenditure incurred on a stand at the racecourse in Roscommon managed by the Respondents, should be treated for income tax purposes as
(a) deductible repairs or
(b) as non-deductible capital expenditure or
(c) as expenditure on plant thus qualifying for an allowance.
The following facts were proved or admitted at the hearing:
a A. The respondent committee is engaged in the trade of promoting and organising horse races at their racecourse for viewing by the public. The public are admitted on payment of an entrance fee. The horse races take place on the Race Track at the course in Roscommon. There has been at the Racecourse a substantial stand for many years.
b B. The stand is used by patrons for watching horse races. It raises patrons to a higher level to view the races and helps to create an atmosphere of excitement during the running of the race because of the close contact between them. It also provides shelter from the elements. When each race is over some of the patrons leave the stand and walk around the racecourse enclosure to view horses, to buy drinks, meet friends, place bets and so forth.
c C. During 1981 and 1982 the committee carried out extensive work at the racecourse, mainly affecting the patrons stand. This work can be categorised broadly as follows:
(i) The upper section of terracing and the passageway between upper and lower terracing was retained together with the existing columns, beams and storage area under this terracing. The lower terracing was altered as follows. Narrow steps towards the front of the existing stand were covered in and replaced with new wider steps, placed over them, which extended the terraced area significantly outwards. The new steps have a rise of 7.5 inches of which 2.5 inches is achieved by means of a slope from the front to the rear of each step. The original step had a simple rise of 15 inches and one person only could stand on each step while two people may stand on the new step. As a result of the said works there was an increase of approximately 40% in the standing area;
(ii) the existing bar at ground floor level under the stand was extended backwards by approximately 50% of its length;
(iii) the external walls to the rear and side of the stand were removed and replaced with new cavity walls and glazing; the existing walls were saturated, wet and crumbling;
(iv) a new reserve bar was constructed at the upper level of the stand over the extension to the existing ground floor bar. This provided viewing facilities over the course;
(v) the existing stand had a hayshed type roof of corrugated galvanised steel which had been repaired from time to time in the past. The new roof consisted of profiled steel over a greater stand area being of a different design to the old roof and incorporating new guttering and drainage systems. The former supports for the original roof had been cast iron pillars and these were replaced by steel pillar supports which extended over the extended terrace area being the existing terrace area and the new rear extension housing the bars. The roof in its entirety was replaced;
(vi) the work undertaken in the stand provided a new and enlarged stand with new facilities for patrons in the form of a viewing bar as well as increasing the stand capacity by approximately 40%. The bar under the terrace area was extended by 50% approximately.
d D. The respondent committee makes up its accounts annually to 31st December. During the years relevant to the appeals before me expenditure was incurred on these works as follows:-
| Year Ended 31/12/1981 | £117,488 |
| Year Ended 31/12/1982 | £ 95,215 |
Grants were received from The Racing Board of £70,493 and £55,726 in each year respectively towards this expenditure."
The learned Circuit Judge held:-
(1) "The works on part of the stand retained constituted repairs. The characteristics which make a stand are basically the same in all stands; while one stand may look different from another (as in this case) their characteristics have by and large remained unchanged. Total expenditure £122,133 less grants of £72,474 giving a net of £49,659 which was allowable as repairs;
(2) The new reserve bar, which had not previously existed, was a definite capital improvement to the whole structure. Total expenditure involved was £38,595;
(3) The new work on the stand constituted plant for capital allowance purposes totalling £51,975."
On this basis he determined figures for each year. The Inspector required a Consultative Case Stated so the question for the opinion of the High Court is whether the learned Circuit Judge was right in holding that
(1) expenditure on repairs was allowable as a deduction in computing profits amounting to £49,659 and
(2) the stand and new work constituted plant for the purposes of Section 241 Income Tax Act 1967.
At the hearing before me it was conceded on behalf of the Respondents that not only the new reserve bar at the rear of the top of the stand but also the 50% extension to the ground floor bar underneath it and the roof which extended back from the old roof was a capital improvement and no claim was made on the basis that it was plant. Also the Respondent no longer claimed that the glazing introduced at the side of the stand and the additional section of roof...
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O'Grady (Inspector of Taxes) v Roscommon Race Course Committee
...it held that the relevant areas of the stand constituted plant. On a case stated, the High Court held that this was correct. (See [1993] 1 I.R. 511). Held by the Supreme Court (O'Flaherty, Blayney and Barrington JJ.), in dismissing the appellant's appeal, 1, that if the relevant areas of th......