Law: Income Tax Act, 1922

Section:

Income-tax---Schedule D, Case I---Purchase, development and sale of land---Isolated transaction---Land acquired mainly for business purposes of taxpayer--¬Subsidiary indefinite purpose to develop if planning permission obtained --¬Whether land acquired as trading stock---Whether profit from sale assessable as taxpayer's income. In 1977 the taxpayer a general dealer and contractor, acquired 10 acres of land together with an old mill building for 17,000 Sterling. His principal purpose in so doing was to provide himself with office and storage space for his business. After the purchase he applied unsuccessfully for planning permission to build an agricultural worker's house on the land. In 1980 he submitted a further planning application that was granted. Thereafter the taxpayer himself built a four-bed roomed house on the land and in 1982 he sold it without having lived in it realizing a profit of some 90,000 Sterling. Subsequently he purchased a farm property from where he continued to run his business. He was assessed to income-tax under Case I of Schedule D for 1982-83 on the basis that the gain from the sale of the property was a trading profit within the meaning of section 109 of the Income and Corporation Taxes Act, 1970. The taxpayer appealed to general commissioners, who found that although the property was acquired by the taxpayer principally in order to provide office and storage space for his business he did not intend to use the whole of the land for that purpose or to live there, but that he did intend to carry on some limited farming activities on the land. They concluded that the profits arising on the sale of the land was assessable under Case I of Schedule D and they confirmed the assessment in principle. Vinelott, J, dismissed an appeal by the taxpayer by way of case stated, holding that the commissioners, on the facts found, were entitled to conclude that the transaction was an adventure in the nature of trade. On appeal by the taxpayer--- Held, allowing the appeal (Ralph Gibson, L.J. dissenting), that whether the transaction was an adventure in the nature of trade depended in part on the purpose or purposes of the taxpayer at the time of the…

Deprecated: trim(): Passing null to parameter #1 ($string) of type string is deprecated in /home/digixyei/sldsystempk.com/view/master-layout/view_case.php on line 492