McGarry v Limerick Gas Committee

JurisdictionIreland
Judgment Date14 January 1932
Date14 January 1932
CourtHigh Court (Irish Free State)
McGarry v. Limerick Gas Committee.
W. S. McGARRY, Inspector of Taxes
Appellant
and
LIMERICK GAS COMMITTEE
Respondents.

Revenue - Income tax - Trade profits - Deductions - Money wholly and exclusively laid out for trade - Cost of promoting Private Bill to authorise local body to pay compensation to dismissed servants - Income or capital expenditure - Gas works - Profits of the year - Income Tax Act, 1918Sch. A, r. 3 of No. III Rules; Sch. D, Rules applicable to Cases I and II, r. 3.

Case Stated under sect. 149 of the Income Tax Act, 1918, by the Special Commissioners for the purposes of the Income Tax Acts, for the opinion of the High Court.

The facts, as set out in the case stated, were as follows:—

"1. At a meeting of the Commissioners for the Special Purposes of the Income Tax Acts held on the 9th April, 1930, at Limerick, for the purpose of hearing appeals, the Limerick Gas Committee (hereinafter referred to as 'the Gas Committee') appealed against an estimated assessment to income tax for the year of assessment 1929-30, in respect of the profits of carrying on a gas undertaking at Limerick.

The gas undertaking was, for the purposes of Schedule A, assessed and charged under Schedule D in accordance with the Rules applicable to Schedule D so far as the same were not inconsistent with the Rules of No. III. of Schedule A of the Income Tax Act, 1918.

2. The sole question in dispute is whether, in computing the liability of the Gas Committee to income tax for the year 1929—30, expenses to the amount of £200 incurred by the Gas Committee in promoting a Bill in the Oireachtas, can be treated as an admissible deduction in the Revenue Account of the Gas Committee for the year ended 31st March, 1929.

3. The following facts were admitted or proved:—

By the Limerick Improvement Act, 1853 (15 & 16 Vict. c. 194), certain powers were (amongst others) conferred upon the Mayor, Aldermen and Burgesses of the Borough of Limerick (hereinafter referred to as 'the Corporation'), as to the lighting of the Borough with gas.

4. By the Limerick Corporation Gas Act, 1878 (41 & 42 Vict. c. 160), certain further powers and duties as to the lighting of the Borough with gas were conferred upon the Corporation, and by the said Act it was provided that the gas undertaking of the Corporation should be managed and controlled by the Corporation, acting by the Borough Council, and with the assistance of the Gas Committee constituted by the said Act in whom certain powers and duties relating to the management of the said gas undertaking were vested.

5. The Corporation recently undertook certain works for the improvement of the said gas undertaking by the erection and installation of modern plant and machinery, including vertical retorts, and by the laying of new mains and replacing existing mains within the area supplied by the said gas undertaking.

6. The erection and installation of the said modern plant and machinery enabled the Gas Committee to reduce the number of their employees in connection with the said undertaking, and involved the dismissal of certain artisans, gas workmen, labourers and servants theretofore employed in connection with the said gas undertaking.

7. A Bill was promoted in the Oireachtas by the Gas Committee for the purpose of empowering the Corporation to grant and pay compensation by way of pensions or allowances in certain cases to artisans, workmen, labourers and servants theretofore in the employment of the Gas Committee.

8. Expenses to the amount of £200 were incurred by the Gas Committee in promoting the said Bill in the Oireachtas. The item 'Pensions Act: £200' appears the debit side of the revenue account of the Gas Committee for the year ended 31st March, 1929, and the said sum was expended in the said year.

9. The said Bill became law on the 23rd April, 1929 under the title of the 'Limerick Corporation Gas Under taking (Pensions) Act, 1929, (No. 1 (Private) of 1929), and is hereinafter referred to as 'the Act.' [A copy of the Act was annexed and formed part of the Case.]

10. The provisions of the Act are briefly as follows:—

Sect. 1 deals with the interpretation of terms. Sect. 2 provides for the execution of the Act by the Corporation and for the delegation of powers of the Gas Committee. Sect. 3 provides for the establishment of a Superannuation Fund for the payment of compensation authorised by the Act. Sect. 4 authorises the granting of compensation 'to any employee with not less than ten years' service who was in the employment of the Gas Committee on the 1st day of January, 1928, and whose employment shall have been determined by the Gas Committee prior to the 31st December, 1929, for a cause other than misconduct or incompetence.' The expression 'employee' is defined in sect. 1 as 'an artisan, or workman, or labourer, or servant, who is, or has been employed by the Gas Committee devoting the whole of his working time to such employment.' Sect. 5 provides for the manner in...

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