Revenue Commissioners v Auld, Pemberton, & Company
| Jurisdiction | Ireland |
| Judgment Date | 01 January 1919 |
| Date | 01 January 1919 |
| Court | King's Bench Division (Ireland) |
K. B. Div.
Revenue - Excess profits - "Special circumstances" - Finance (No. 2) Act,1915 (5 & 6 Geo. 5, c. 89), schedule 4, part 1, clause 5 - Appeal - Exclusive jurisdiction of commissioners.
Special Case Stated.
The following are the material portions of the case as stated by his Honor the Recorder of Belfast:—
"Two questions were raised on behalf of the appellants (Messrs. Auld & Pemberton, Ltd.), but as I decided one of these in favour of the commissioners, it is only necessary to deal with the other, viz., whether there were any 'special circumstances' within the meaning of section 5, part 1, of the fourth schedule to the Finance (No. 2) Act, 1915, which justified me in allowing or enabled me to allow for the remuneration of directors sums in excess of the 'sums allowed for those purposes in the last pre-war trade year.'
The facts are as follows:—
The company is practically a private company, and Mr. Auld and Mr. Pemberton are practically the company. Prior to the formation of the company both these gentlemen were employed by Mitchell & Co., tobacco merchants, of Dublin, at yearly salaries of, in Auld's case, £150 and £50 bonus, in Pemberton's case of £110 and dinner free, the value of the latter being taken at the hearing before me at £15 yearly. When Auld and Pemberton started business on their own account it was agreed that Auld should receive a yearly salary of £100 and Pemberton £76. They relied upon their share of the profits of the company to make up their means of livelihood, and I inferred and found that the salaries last mentioned were fixed as a matter of convenience and a mode of distribution of profits, and not at all as the actual and proper remuneration for their services. Men whose yearly salaries from their former employers amounted, as stated above, to £200 and £125 respectively could not be considered adequately remunerated by £100 and £76 a year in respect of their services to the company. It appeared to me and I found that there were 'special circumstance' in the case, and that the real and fair remuneration to be allowed the directors as directors was at least equal to, if it did not exceed, what they had earned as employees, and I fixed that at £325.
A case of The King v. Francis Fenwick & Co., Ltd. was quoted to me by the income tax official as a conclusive...
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