Law:

Section:

- Sections 160 and 161(1) - Income-tax Act, 1952 CASE REFERRED TO Evans Medical Supplies Ltd. v. Moriarty [1958] 1 WLR. 66; [1957] 3 All ER 718 ; 37 TC 540, (HL). STATEMENT OF CASE Buckley, J. - The taxpayer, J.S. Rendell, appealed to the special commissioners against an assessment to income tax under Schedule E made upon him for the year 1958 to 1959 in the sum of £3,919 in respect of his emoluments as a director of Peter Merchant Ltd. Included in the assessment appealed against was a sum of £641 which was paid by Peter Merchant Ltd. in the circumstances set out below. The question for determination was whether that sum of £641 was an expense incurred "in or in connection with the provision" for the taxpayer of "other benefits or facilities of whatsoever nature" within the meaning of section 161 of the Income Tax Act, 1952, with the result that it was a perquisite of his office as director to be included in the emoluments thereof assessable to income tax. The following facts were found by the special commissioners :-The taxpayer was a full-time director of Peter Merchant Ltd. On July 23, 1958, while returning to the head office of the company after making a call on the company's business the car which he was driving unaccountably left the road and killed a pedestrian. The car belonged to the company. The taxpayer was injured and was taken to hospital, and on the following day he instructed his secretary, Miss Greig, to get in touch with the Automobile Association, of which he was a member, and ask them to arrange for a solicitor to see him to give him legal advice. 2. The chairman and managing director of Lockhart Group Ltd., of which Peter Merchant Ltd. was a wholly owned subsidiary, happened to hear the taxpayer's secretary speaking to another director about her instructions when she returned to the company's office, and he instructed her not to get in touch with the Automobile Association. He then telephoned a partner in the firm of solicitors who acted as solicitors to Lockhart Group Ltd. and to the company, and gave him details of the accident in which the taxpayer had been involved, and asked what the latter's position might be. The solicitor stated that…

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