INLAND REVENUE COMMISSIONERS v. FRANCIS WEST AND OTHERS; SAME v. FRED WEST AND OTHERS; SAME v. ROBERT FORMAN AND OTHERS; SAME v. WILLIAM REID AND OTHERS.

(1950) 84 Ll.L.Rep. 284

COURT OF SESSION.

Before Lord Cooper (Lord President), Lord Carmont and Lord Keith.

Revenue - Income tax - Assessment - Reconditioning moneys-Repairs to ship-Lump sum paid by charterers in lieu of liability for reconditioning -Requisition charter by M.W.T. of respondents' fishing vessels Laurel and Guelder Rose-Charter providing for payment of hire and for redelivery of vessels in same good order as delivered, fair wear and tear excepted -Derequisition-Payment of lump sums by charterers in lieu of their obligation to restore vessels to their pre-war condition-Part only of such sums spent by respondents in restoration - Assessment to income tax of respondents' profits from vessels - Payments for hire treated as trading receipts-Inclusion of whole of reconditioning moneys as trading receipts with allowance for amounts spent on repairs-Claim by respondents that reconditioning moneys were capital receipts-Decision of Special Commissioners in favour of respondents-Case stated-Whether reconditioning moneys were trading receipts or capital receipts - Income Tax Act, 1918, Schedule D, Cases I and II, Rule 3 (d). Revenue-Income tax-Balancing charges -Sale of part shares in respondents' fishing vessels Guelder Rose and Mistress Isa-Whether sale of Inland Revenue Commissioners v. West and Others. Ct. of Sess. 285 "plant" - Ownership of vessels - Custom of Scottish herring fishing industry-Fishing partnership formed by individual groups of part-owners, each being entitled to share in profits of enterprise: one group (which included respondents) holding shares in and providing vessel; another group providing fishing gear; and the crew providing labour-Ownership of vessels divided into 64 parts, each part-owner having undivided share in the whole- Sale by certain part-owners of their shares in vessels-Vessels continuing to fish as before-Sum received for shares greater than written-down value of proportionate part of vessel-Contention by Crown that such sale was a sale of plant which gave rise to a balancing charge-Claim by Crown against respondents jointly for payment of balancing charges - Decision of Special Commissioners in favour of respondents-Case stated-Income Tax Act, 1945, Sect. 17. Revenue-Income tax-Balancing charges -Sale of whole of shares in vessel- Whether sale of "plant"-Sale by all part-owners of Girl Eileen (respondents) to purchasers who continued to fish vessel from different port-Sale price in excess of written-down value of vessel-Discontinuance of business- Decision of Special Commissioners in favour of respondents-Case stated- Income Tax Act, 1945, Sect. 17.