INCOME TAX DECISION.
Deduction of Value of Premises
Abroad.
In the King's Bench Division of the High Court of Justice (before Mr. Justice Atkin) on July 12, the case of Horses A. Stevens (Surveyor of Taxes). E.
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It was also contended that by the Finance Act, 1898 (61 and 62 Vic, o. 10), seo. 9 it was enacted that:
***Where in estimating the smount of annual profits arising from any trade and chargeable to income tax under Schedule D of the Income Tax Act, 1853, any eum is deducted on account of the annual value of the permises used for the purpose of such trade.. the sum deducted shall not exceed
THE HONGKONG TELEGRAPH, TUESDAY, AUGUST 15, 1916.
THE LATE MR. F.X.V. KIBEIRO.
Funeral at Happy Valley.
heard with regret yesterday of the A very wide circle of friends death of Mr. Francisco X. V. on the morning of the preceding Ribeiro, which took place early
Boustead and Co. was heard. the amount of the assessment of day. The deceased, who was the premises for the purposes of one of the oldest and most income-tax under Schedule A to the said Act....'
respected members of the Porta- And that se it was not disputed employed at Messrs. Jardine, community, had been goose that there was no assessment to income-tax. ander Schedule. A forty-one years, thus being one of Matheson and Company's for about applicable to or in force at Sings the firm's veterans sa far as youra pore and Penang, where the of service business was carried on, no claim held an appointment in the to any dedaction could arise.
(0) Mr. Douglas Hogg, for the responding office and after respondeuta, contended to the working there for over twenty contrary.
years was tracsferred to the book office, with which depart.
This appeal, by way of case stated, by the Inland Revenue anthorities from a decision of the Commissioners for the General Purposes of the Income Tax Acte for the City of London, raised the question whether in fixing the profits of business for the par- poses of income-tax it was per- missible to deduct the annual value of branch premises abroad. The Solicitor-General (Sir G. Cave, K.O.) and Mr. Parr (for Mr. Raymond Asquith, on military pervice) appeared for the Crown; and Mr. Dake, K.C., and Mr. D Hogg appeared for the respond
ents.
The case was as follows:- (1) At a meeting of the Com- missioners held at the Guildhall
went. He first
(7) The following cases were referred to:-Russell v. Aberdeen at he was connected at the time Town and County Bank (4 the
of his death. Of a genial die- Times Law Reports, 500 13 App and respected by all his fellow- position, he was generally liked Cas., 418); General Hydraulic workers, and his sterling qualities. Power Company (Limited) were remarked upon by all with Hancock (30 the Times Law Re- ports, 203; [1914] 2 K. B., 21);The deceased leaves a widow and whom he was brought in contact. Gresham Lite Aurance Society
grown-up family.
on November 12, 1914, the Styles (1892) A. O., 300); respondents, E. Boustead & Co., Ashton Gas Company v Attorney evening at Happy Valley in the The faneral took place last of 3, Lloyd's-avenue, in the City General ([1996] A O., 10); Strong presence of a large gathering of of London, appealed against Band Co. v. Woodifield (22 the friends, colleagues and relativee. additional first assessment of Times Law Reports, 754: [1998] The cortege left the deceased's £1,084 under Schedule D to A.C. 448); Tennant v. Smith
mide on them by the Com-Walte missioners on August 12, 1913, Cas., 76). for the financial year 1912, ended April 5, 1913.
The tax in a first sesessment of £73,857, dated December 13, 1912, for the same period had been duly paid.
Findings of the Commissioners,
DAIRY FARM NEWS.
NOTHING CAN EXCEL,
OUR
SPECIAL DISPLAY
of:
DAISY BRAND "SUMMIT" AND "ARROW"
BUTTER.
IT IS ABSOLUTELY THE BEST NEW ZEALAND. TABLE BUTTER.
SOLE AGENTS:-
--):0:(-
THE DAIRY FARM CO., LD.
NORTH BRITISH
AND
MERCANTILE INSURANCE CO.,
in which are vested the shares of THE OCEAN MARINE INSURANCE CO., LTD.
to
AND
THE RAILWAY PASSEN. GERS ASSURANCE CO. The Undersigned AGENTS for
ACCEPT RISKS against FIRE at Current Rates.
SHEWAN, TOMES & CO.
Agenta.
the Act 16 and 17 Vic. o. 341892) A. C.. 150); Gillatt and residence at Kowloon at 5.15.the above Company are prepared
Colquhoun (2 Tax passing the Monement at six o'elcek. Among those present were The Hon. Mr. David Landale, and Messrs. O. W. Berwick, L. N. Eastman, S. De Luz, J. M. De Leefe, R. E. Macdougall, A. W.
(i.) That the premises were da Silva, A. A. Remedios, L. E. Graca, A. V. da Silva, M. A. need exclusively for businese Remedioe, H. Da Luz, F. J. purposes, and that their annual Ribeiro, E. Osmas, A. Ozman, value was at least the amount G. Osman, and many others from claimed as deduction.
the firm of Jardine, Matheson and
(2) At the hearing of the appeal the following facts were proved or admitted-The re- spondents carry on business at Singapore and Penang and other places in the East as well as in the City of London. They claimed to deduct a an expense the suanal value of the business premises which they own and occupy at Singapore and Penang where part of the profits have been made on which the Assessment was based.
(3) It was not dieputed that the amount of the City rating valeation of the business premises bocupied by the respondents in Singapore and Penang
WLE
The Commissioners found as facts:
(ii.) That the annual value of Co., as well as a large following of the premises was an expenditare friends. The floral tributes were necessary for earning the receipts numerous, and included several for the year in question.
(iii) That the respondents in the employees of his own particu- from members of deceased's firm, neing the premises put themselves lar cffice sending a large perpetua! to the expense of their annual value for their trade, and that the annual value was money wholly trade. and exclusively expended for their
the assessment.
The Commissionere discharged
The Solicitor-General, in open- ing the appeal, referred to the
wreath.
TYPHOON WARNING..
The telegram quoted below was received by the American
correctly stated at £3,264 and Income Tax Acts and the rules, Consulate General, Hongkong.. the payment of the rates and tame and to the London and Liverpool from the Manils Observatory at A admitted by the Surveyor of and Globe case (6 Tax Cases, 327) 8 p.m. yesterday:Cyclone or Titos as a proper deduction and Deher's Wiltshire Brewery
7. Brace 31 the Times Law Reyphoon W. of Naha, filling
in expense in the respondents'
profit and loss account, and for parts, 104; [1916] A.C., 433), in addition to the cases cited in the case stated abɔve. This property
Le purposes of the present cass it not disputed that 63,254 was the sunus! valdo)
W&
up.
I the premises. It wae a trade ssset of the firm; itmercial meaning of those words Lot disputed by the Surveyor of and if the capital had remained That was clear from the judgment was capital pat into the busines, in ordinary mercantile practice, Cexes that if the premises had in the form of money the respond-in Usher's Wiltshire Brewery v been occupied at such rental of acts could not have deducted Brace (6 Taz Cas., 119), and in 3,254 in the United Kingdom anything for interest on it. In the absence of any express limits he amount of such rent would any event this deduction was tion in the Acte he would have ave been allowed se a deduction barred by the Act of 1898. r expense, but it was contended
had no doubt that the annual
Mr. Doke submitted that the value of business premises was B
Yorkshire InsuranceCo.,Ltd. ESTABLISHED 1884. ·
The Undersigned AGENTS for the above Company are prepared to ACCEPT RISKS against FIRE at Current Rates.
SHEWAN, TOMES & CO.
AGENTS.
$10,000 FINE.
A Chinese shio's carpenter was charged before Mr. Hazeland, at? the Police Court this morning, taels of opium aboard the 6.5. with being in possession of 181 Hongkong.
he went aboard the ship on Sergeant Pincott stated that Saturday and found Defendant brought the key and
the
door of defendant's asbin looked.
SAKURA BEER
| REVERS
Emance Men Co. 4.7%.
SOLE AGENTS :---
SUZUKI & CO.
TEL. 468 ALEXANDRA BUILDING.
TO-DAY'S ADVERTISEMENTS,
WANTED,
WANTED by Lady, airy room in goed locality with board. Hongkong or Kowlcon. Send particulars to X. Y. Z. c/o Hong- kong Telegraph."
LOST. OST-A large single-ston
diamond brooch. Reward search be found two baskets, on returning to Hongkong Hote which contained the opiam. Defendant claimed that the small basket belonged to snother man in Haiphong. The defendant produced the key of the cabin and unlocked the small basket.
A fine of $10,000, or in default, eix months' imprisonment, was imposed.
PASSENGERS ARRIVED.
PUBLIC AUCTION. THE Undersigned has received instructions to sell by Public Auction on THURSDAY, the 24th August, 1916. commencing at 2.30 p.m.
4).
at No. 74 Humph eye Buildings, Kowloon (Hanoi Road.)
Per «s. HONGBEE from Singapore, A Quantity of Valuable Kouse- on 14th Aug. Cory Dr
Hup
Per & HUPEH, from Hangkor, on
Lankaster A J ~Page Miu EX
Page Miss C
bat as there was no Schedule Atands to be taxed were the re-proper debit item in the compats- witness went inside. After s u under the Income Tax Acis ceipts from the business lees the tion of the profite of the business. eferring to foreign companies amount of money laid out oi rimposed in Singapore or clarively on the business, and the authority for holding that in fix-
Apart from that, there enang, the respondents should ot be allowed any deduction is
expense of keeping up the ing the profit of a basiness the spect of the rental rains of the premises at Singapore and else annual value of the business pre- remises that they occupied for cost of carrying on the businese. (Russell v. Aberdeen Town and where in the East was part of the mises ` must be deducted. beir busines).
Profite could not be ascertained County Bick (eap.); Usher's (4) Mr. Soagge, partner in until the coat of earning was Wiltshire Brewery Y. Bruce he respondents firm, gave known, and it had been laid (sap.).) It was true that those vidence that the value of their down that profi's must be as cases only dealt expressly with remises was greater than the certained on ordinary business businesses carried mannt at which they had been principles after making ordinary country, but he could not see any on in this sted, and that the amount business allowances. The money reason harged was not excessive, also laid out wae act crpital invested tween cases where the basineer for distinguishing be- hat it would have been impossible in the business; money sunk in was carried on here and cases 14th Aug. bbare made any profit in their premises was. different from where it was carried on abroad. ingapore or Penang bussiness if money circulating in business. hey had not had premises of the
The Solicitor-General argood The Solicitor-General replied, that the annual value of the alue of the amount charged as a eduction in the profit and loss)
premises was really interest on count; and he claimed, there
the capital inverted in the pre- Mr. Justice Atkió, in delivering mista; but though interest on bre, that the annual value was a judgment, said that the respond capital could not se such be de- reliminary expense essential to ente carried on business both in ducted, the House of Lords had e making of any profit charge the Esst and in this country, and held that the annual value of ble under the Act. He also stated had been properly assessed in business premises could be so at the whole of the premises respect of the profits of the busi- deducted. The Solicitor-General Full of aged for were built and used ness in the Esst. The question then signed that even seeaming Forinse lely for the firm's business,
Sander (6) Mr. Dickens, K.C. (with profits they could deduct the treated as expenditure it ment was whether in sedertaining their that the annual value could be
Gerson
Mr & Mr Stowell
Smith m Mr. Sheldon), for the BEZcal value of their premises at alan be regarded as income, money
Herwicer
Uswis arveyor of Tazee, claimed to Singapore and Penang. It was spent in paying rent to the owners Kerstral D
Vanstone rike out from the profit and lose found as a fact that the premises themselves; bat in bis opinion Lowara
Walkers Williams count the amount so charged ware used exclusively for the the annual value was an item of
Wagner way of deduction as an ex- basinom, and
Loder Kr
Walserback that inse, and contended that on the hed
they cost and was not a receipt at all. Lootmaker J
Listoti Mr & Mrs Young Mr & Mrs nstruction of the Income Tax least equal
sannal value If the argument was good the
Per 1. ANNA, from Bangkok, en the amount House of Lords decision, must be 15th Avg. -
respondents wrong.
Judgment.
to
14th Aug
Per sa. MALTA, from Bombay, Backhouse M J Mallett Burgess
McIntyre Masson H McCullum Dr Melwani S B KiDle C Norri Patry Rowe
Cell
Beaneit Clarke Mias Delamore T Elion Da'lins Capt
Ewens
Ewans Mra
Gibson 4 Jenkin
Jones
Haguard Faracho Mr &
Mrs A A
Rowa Riach.
Thomsen
Per a YUENSANG, from Manila, on 15th Aur Oorwell Mr & Mrs Horsley
of 5 and 6 Vio, a. 35 seo, 159 the deducted. The duction should not be allowed, ware chargeable under. Bobedule the rules prohibited all dedao-D, and whether they could deduct with costs.
The appeal must be dismissed. except those expressly the annual value of the premises iumerated in the Act; and that depended on the rules. Prote or Revenue; Mosers, Thompson, Baker O
Solicitors.--Boliaitor of Inland
• deduction ... Was not so gains must be ascertained in as Quarroll, and Jones. - Times cordanos with the ordinary com- 'report,
umerated.
Griswold
Harding
Haus in A
Johnatona Lewis Mille
Vidal Mm Ey
hold Furniture
Comprising:
'Blackwood hatstand, carved blackwood & cherrywood tables, blackwood desk, morocco covered club chair & couch, silver & cosy comer.
mcrocco covered
curio cabinets, teak bookcases, fancy chair & tables. Tientsin. curtains, etc, etc.
Teak dining table, mordeco covered dining chairs, teak side"! board with bevelled panels, silver) & cut-glass, brass fenders, ejec-i tric fittings, etc., etc.
Carved Javanese & Malay swords (silver mounted and ivory handles).
Brass & brass mounted double bedsteads, dressing tables, chest of drawers, fine teak wardrobes. with bevelled glass, iron safe, etc., etc.
And
Collection of Chinese Porcelain & OM Bronzes, including raregenuine specimens. Also..
Some. Fine Oli Paintings." Terms: Cash on delivery, On view from Wednesday the 23rd inst.
Catalogue will be issued.
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