Law:

Section:

Sections 245, 255(3), 292 and 323 of the Income-tax Act, 1952 CASE REVIEW Thomas Fattorini (Lancashire) Ltd. v. CIR [1942] A.C. 643; [1942] 1 All E.R. 619; 24 T.C. 328; 11 I.T.R. (Suppl.) 50; Kirkness (Inspector of Taxes) v. John Hudson and Co. Ltd. [1955] A.C. 696; [1952] 2 All E.R. 345; sub mom. John Hudson and Co. Ltd. v.Kirkness 36 T.C. 28 and Townsend v. Electrical Yarms Ltd. [1952] 1 T.L.R. 728; [1952] 1 All E.R. 918; 33 T.C. 166 followed and relied upon. CASES REFERRED TO Thomas Fattorini (Lancashire ) Ltd. v. IRC [1942] AC 643; [1942] 1 All. ER 619,Kirkness v. John Hudson & Co. Ltd. [1955] AC 696, 729; [1955] 2 All ER 345, John Hudson & Co. Ltd. v. Kirkness 36 TC 28 and Townsend v. Electrical Yarns Ltd. [1952] 1 TLR 728; [1952] 1 TLR 728; 33 TC 166. JUDGMENT Harman, J. The taxpayer company was a company to which section 245 of the Income-tax Act, 1952, applied. That section repeats section 21 of the Act of 1922, which imposed surtax on the undistributed income of certain companies, of which this was one. The question between the parties is whether, for the purpose of calculating what I may call the surtax income of the respondent company, a balancing charge of some £19,000 ought to be treated as part of the company's actual income. The Crown contends that it should, and, therefore, that it should be treated as part of that income for apportionment among the members of the company in order that they may be surtaxable on it. The company contends that it should not be so treated, and with that view the Special Commissioners agreed. 2. The facts are extremely small, in compass, and clear. The company ceased trading on April 28, 1951, and sold its plant and machinery. It went into liquidation on April 16, 1952. At that time no accounts had been made up within the meaning of the Income-tax Acts since April 30, 1950. Therefore, the period over which the company had to be taxed was the period from April 30, 1950, to April 16, 1952. 3. The company having gone into liquidation, it follows from section 253 of the Income-tax Act, 1952, that the income of the company over the relevant period, i.e., April, 1950, to April, 1952, is to be deemed to be income of…

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