E. MCKENNA v J. HERLIHY (Surveyor of Taxes)

• Jurisdiction: Ireland
• Judgment Date: 29 June 1920
• Date: 29 June 1920
• Court: King's Bench Division (Ireland)

NO. 426.-HIGH COURT OF JUSTICE, IRELAND (KING'S BENCH DIVISION).-

(1) E. MCKENNA

and

J. HERLIHY (Surveyor of Taxes).(2) R. WOODBURN v J. HERLIHY (Surveyor of Taxes)

Income Tax. - Grazing rights let over lands in occupation of owner. - Liability of person renting grazing rights - Income Tax Act, 1842 (5 & 6 Vict. c. 35), Section 100, Schedule D, Case VI.

Appellants were brecders and buyers of cattle and, in addition to farming lands in respect of the occupation of which they were assessed under Schedule B, they rented land for grazing on what is known as the eleven months system and for which tax under both Schedule A and B was assessed upon and paid by the owner. Appellants themselves were neither assessed under Schedule B nor rated to the poor for this land. They appealed against assessments made under Schedule D in respect of profits from grazing cattle thereon.

Held, that Appellants were correctly charged under the Sixth Case of Schedule D.

(1)-CASE.

Stated under the Taxes Management Act, 1880, Section 59, by the Commissioners for the Special Purposes of the Income Tax Acts for the opinion of the King's Bench Division of the High Court of Justice in Ireland.

1. At a Meeting of the Commissioners for the Special Purposes of the Income Tax Acts, held on 6th December, 1917, at 51, St. Stephen's Green, Dublin, for the purpose of hearing appeals, Mr. Edward McKenna, of Kearneystown, Hazelhatch, Co. Kildare, hereinafter called the Appellant, appealed against an assessment to Income Tax in the sum of £200 for the year ending 5th April, 1918, made upon him in respect of profits on grazing takes under the provisions of Schedule D of the Income Tax Acts.

2. The Appellant is a farmer at Kearneystown, farming some 238 Irish acres, of which some 24 acres are under plough. He is assessed to Income Tax under Schedule B in respect of his occupation of this farm.

3. The Appellant both breeds and buys cattle. It is his custom to rent each year in addition to his farm an area of land on what is known as the eleven months system, and in the year 1917 he so rented 329 Irish acres in two takes.

4. The Income Tax chargeable under Schedules A and B of the Income Tax Acts upon the lands of which the grazing was taken by the Appellant under the eleven months system has been assessed upon and is paid by the owner of the lands in accordance with the usual practice, and the Appeal now in question is against an assessment under Schedule D upon the Appellant in respect of profits made by him from grazing cattle on the lands.

5. Appellant explained that his practice as a farmer is to buy cattle in the late winter or early spring, keep them at grass during the summer and sell them in the autumn. He keeps only a small stock of cattle through the winter. He further explained that the cattle are not sold off the grazing takes, but are brought to his farm (two miles distant) to be finished prior to sale.

6. Persons who hold land on the eleven months system are not rated to the relief of the poor in respect of their grazing takes, and the lettings are made in fields and divisions which need not and usually do not correspond with any areas distinguished in the poor rate. The present Appellant is not rated to the relief of the poor for his grazing takes-the person who is rated is the person from whom he holds the takes, and this is also the person who is assessed to Income Tax Schedule B for the lands.

7. It was stated at the hearing of the Appeal that the Appellant held no written document signed by the owner of the lands to show his right to graze cattle on the lands, but that he had himself signed a document at the time when he took the grazing. This document was not produced at the Appeal. Receipts given to the Appellant, and produced to us at the Appeal, for sums paid by him for grazing under the eleven months system refer to the money paid as paid for "grazing."

8. The Appellant contended that he was an "occupier" of the grazing takes within the meaning of the Income Tax Acts, that income arising from the occupation of land can only be assessed under Schedule B, that consequently the whole of the Income Tax liability in respect of the profits arising out of the occupation of these grazing lands had been exhausted by the...