Law:

Section:

- Section 123, Schedule D, Case I - Income-tax Act, 1952 CASE REFERRED TO British Insulated & Helsby Cables Ltd. v. Atherton [1926] AC 205 ; 42 TLR 187 ; 10 TC 155, Anglo-Persian Oil v.Dale [1932] 1 KB 124 ; 47 TLR 487 ; 16 TC 253, A.G. Moore & Co. v. Hare 1915 SC 91 ; 6 TC 572, Smith's Potato Crisps [1929] Ltd. v. Inland Revenue Commissioners [1948] AC 508 ; 64 TLR 430 ; [1948] 2 All. ER 367 ; 17 ITR Suppl. 1, Rushden Heel Co. Ltd. v. Inland Revenue Commissioners [1948] 2 All. ER 378 ; 30 TC 298 ; 17 ITR Suppl. 19, Southern v. Borax Consolidated Ltd. [1941] 1 KB 111 ; [1940] 4 All. ER 412 ; 23 TC 597 ; 10 ITR Suppl. 1 andMurphy v. Australian Machinery and Investment Co. Ltd. (1947-1948) 30 TC 244. JUDGMENT Lord Evershed M.R.-The question which was raised in this case was whether the appellant company could properly make a deduction, in ascertaining the sum for which they were liable to be taxed under Schedule D in respect of their business as road haulage contractors, of a sum of £ 1,272, the amount of legal charges fruitlessly (as it turned out) expended by them in an attempt to get a variation of what is called an "A" road licence in the year 1952 so as to enable them, under that licence, to operate three additional articulated vehicles. 2. The case stated, which Sir Reginald Hills described as being to some extent a labour-saving operation, expressed in the following lines only the contention of the company : "It was contended on behalf of the company that the legal expenses were incurred in attempts to obtain replacement of the said 'A' licence held before the war and as such were admissible expenses." The reference to "replacement" arises from the fact that originally in 1939 the "A" licence which this company had covered seven vehicles ; they were, in fact, what are called rigid tipper vehicles. In 1952, when the abortive application was made, their "A" licence, which, in the meantime, had been renewed with other variations, allowed but four articulated vehicles and the company proposed to increase the figure of four to the figure of seven which originally had been the number allowed in the year 1939. 3. The answer to the contention so stated…

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