Law:

Section:

- Sections 123(1)(a), 148 & 525(1)(c) - Income-tax Act, 1952 CASE REFERRED TO Dale v. Inland Revenue Commissioners [1954] AC 11, 27 ; [1953] 3 WLR 448 ; [1953] 2 All. ER 671, H.L. JUDGMENT July 28. Lord Reid. -- My Lords, the appellant is the sole partner of the firm of Burnett & Reid, advocates in Aberdeen. In addition to doing the ordinary work of a solicitor the firm act as factors for numerous estates and as secretary of various companies and they do stockbroking business and sell property and timber. In the course of this work they receive on behalf of their clients numerous sums of money, some large and some small, and they pay these sums on receipt into a separate current account "for clients." From this account they pay outgoings due by their clients. In the aggregate they generally hold at least £30,000 of their clients' money and at times the amount is considerably greater. Of course they keep separate ledger accounts for each client and when the appellant sees that there is a considerable sum at the credit of any client and judges that it, or part of it, is not likely to be required for any purpose for some time, he puts that part on deposit receipt earmarked as belonging to that client. No question arises about these cases. When the deposit receipt is uplifted the accrued interest is credited to the particular client. 2. But there still remains large sums which the appellant does not consider it appropriate to deal with in that way. The sum at the credit of a particular client may be small, or, if large, it may be likely to be wanted within a comparatively short time. In such cases there might well be no net gain to the client by putting it on deposit receipt earmarked for him. The general commissioners appear to have thought that he should have put more of his clients' money on deposit receipt earmarked for particular clients but I need not consider that matter. For the purpose of this appeal I can assume that there would have been no net gain to any client if he had done this because the trouble and therefore the expense involved would have exceeded any interest likely to accrue if it had been done. 3. The practice of the appellant was to…

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