The Gazette 1985

381 / 406

GAZETTE JULY/AUGUST 1985
Recent
Irish
Cases
Edited by
Gary Byrne, Solicitor
REVENUE
Company in Voluntary Liquidation —
Acquisition and Disposal of Land —
Assessment to Corporation Tax — Section
18 Finance (Miscellaneous Provisions)
Act, 1 9 6 8, ordinary Ac c oun t i ng
Procedures to be used — distinguish
between Trading and Acquisition and
Disposal of land.
The Company went into voluntary
liquidation on 16 February, 1979. A
declaration of Solvency was filed. The
Company acquired a 34 year lease of a
property from a Director of the Company
for a rent of £2,500 per annum from 1
December, 1975. There was no fine or
premium. The Company sold its interest
to the other shareholder of the Company
on 29 December, 1975 for £100. Could
the Company claim a loss of £24,900 (i.e.
£25,000 ten years capitalisation of profits
less £100 sale price) under Section 18 of
the Finance (Miscellaneous Provisions)
Act, 1968. (This case was prior to Section
29 of the Finance Act, 1981 which
substituted a new Section 18).
The Circuit Court Judge held that the
Company could claim the loss of £24,900
and reduced the assessment of Corpora-
tion Tax to nil. A Case was stated as to
whether or not the Circuit Judge was
correct.
Finlay P. held that the profits of any
particular accounting period must be
taken to consist of the difference between
the receipts from the trade or business
and the expenditure laid out. Their
accounts must be framed consistently
with the ordinary principles of
commercial accounting in so far as they
are applicable and in conformity with the
rules of the Income Tax Acts as modified.
The purpose of Sections 17 and 18 of
the 1968 Act is to make applicable to
trading in land, with particular problems
arising from the creation of interest in
land without a total disposal, the
considerations applicable to the ordinary
method of trading immovable goods.
Therefore ordinary practices of
commercial accounting would not
require an interest in land acquired within
an accounting period and disposed of
prior to the determination of that
accounting period to be valued, rather it
would simply be required to ascertain the
amount the acquisition of
that piece of property and the amount
gained from its disposal.
The Court HELD that Section 18 of
the 1968 Act did not alter this.
The artificial determination of value of
land by Section 18 2(b) and 2(c)(II)
becomes of immediate relevance and
importance if a particular interest in land
forms part of the trading stock at the
opening of an accounting period. It does
not follow that it is relevant nor is it
required to be assessed in relation to an
interest in land acquired and disposed of
within the period.
The Court was not satisfied this now
could be altered by the provisions of
Section 29 of the 1981 Act.
The Court further held that a nil
assessment was in error. The appropriate
assessment must not be based on the
artificial assessment of the cost of
acquisition provided by Section 18 of the
Act of 1968 but rather the calculation
between the amount actually expended (if
any) on the acquisition of the Lease and
the amount actually received on its
disposal together with any appropriate or
permissible deductions or additions.
M. Cronin (Inspector of Taxes) -v- Cork
and County Property Company Limited -
High Court (per Finlay P.), 18 July 1984 -
unreported.
John O'Connor
PLANNING
In deciding whether or not to extend the
duration of a Planning Permission, a
Planning Authority must consider only the
matters specified in Section 4(1) of the
Local Government (Planning & Develop-
ment) Act 1982, and the Planning
Permission sought to be extended must be
the "particular permission" relating to the
development.
The Prosecutor (Developer) obtained
Planning Permission in 1967 for a
development comprising thirty-six semi-
detached houses. In 1983, the
Prosecutor's Architect applied, under
Section 4 of the Local Government
(Planning & Development) Act 1982, for
an extension of the permission which was
due to expire on 31 October 1983.
The Respondent (Local Authority)
refused the Prosecutor's application for
the stated reason that the permission for
thirty-six semi-detached houses was
superceded by subsequent permissions
for a total of eighteen detached houses on
portion of the site, that these detached
houses had been constructed and that due
to this, the development of the site for
thirty-six semi-detached houses as
previously approved could not now be
carried out.
The Prosecutor obtained a conditional
order of Certiorari on the grounds that
the reason for the Respondent's decision
to refuse the application was not one
specified in Section 4 of the 1982 Act and
that the decision was therefore ultra vires
and void.
Section 4(1) of the 1982 Act is
expressed in mandatory terms as follows:
"On an application being made to
them on that behalf, a Planning
Authority shall, as regards a
particular permission, extend the
a p p r o p r i a te p e r i o d, by s u ch
additional period as the Authority
consider requisite to enable the
development to which the permission
relates to be completed, if, and only if,
each of the following requirements is
complied with:
(a) The Application is in accordance
with such regulations under this
Act as apply to it,
(b) any requirements of, or made
under, such regulations are
complied with as regards the
application, and
(c) the Authority are satisfied in
relation to the permission that —
(i) The development to which
such permission relates
commenced before the
expiration of the appro-
priate period/s sought to be
extended, and
(ii) substantial works were
carried out pursuant to such
permission during such
period and,
(iii) the development will be
completed within a "reason-
able time."
The "appropriate period" is a limita-
tion created by Section 2 of the Act on the
duration of the Planning Permission.
In applying for the extension of the
1967 permission and in seeking to satisfy
the Respondents as to the matters
referred to at sub-paragraphs (i)-(iii) of
Section 4(l)(c) of the Act, the
Prosecutor's Architects represented that
the Development to which the particular
permission related had been commenced
to the extent of substantial work done,
and that it could be completed within a
reasonable time.
On inspecting the Planning register and
the site, the Respondents found that the
Prosecutor had obtained three further
permissions relating to portions of the
same site and on foot of two of these, had
constructed eighteen detached houses.
HELD per Gannon J.:—
Section 4(1) of the 1982 Act refers to
the permission sought to be extended as
"a particular permission" thus ensuring
that in considering any application, the
Planning Authority will deal with it on its
own facts and circumstances and not as
being governed by considerations given
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