385 / 406
GAZETTE
JULY/AUGUST
1985
Others
[1984] 2 All E.R. 358 at 363;
Tolley
-v-
Morris
[1979] 1 All E.R. 71 and [1979]
2 All E.R. 561). He expressed disagree-
ment with the proposition that there is an
onus on an infant, as so defined in the
Statute of Limitations, to explain delay in
the commencement or prosecution of an
action, neither did he accept that the
Plaintiff necessarily has an alternative
course of action for the purpose of
recovering damages or compensation. If
the Plaintiff were to sue her present
Solicitor her action might well be tried by
a Judge and Jury (see
Finlav
-v-
Murtagh
[1979] I.R. 249) and he would be far from
confident that a Jury or, indeed, a Judge
sitting alone will conclude that the
Plaintiff's Solicitor has been in breach of
duty amounting to breach of Contract or
negligence in his conduct of the
Proceedings. He would allow the Appeal
and permit the Action to proceed.
O'Domhnaill-v- Merrick - SupremeCourt
(per Henchv J.. Griffin ./. concurring -
McCarthy J. Diss. [1985] ILRM 40 -
unreported.
Franklin O'Sulllvan
TAX CASES
The following summaries have been
supplied by the Office of the Revenue
Commissioners.
CORPORATION TAX
Section 241 of the Income Tax Act, 1967
and section 36 of the Finance Act, 1971, as
applied for corporation tax purposes by
section 2 of the Corporation Tax Act,
1976 — whether company entitled to claim
100% wear and tear allowance on the
provision of a deep pit poultry house and
equipment for the purpose of its business—
whether expenditure incurred in respect of
items of plant and machinery.
The company carried on the business
of egg production and during the accoun-
ting period ended 31 December, 1976
expended £45,935 on the provision of a
deep pit poultry house and equipment.
The cedarwood poultry house was raised
approximately six feet above the ground
and contained tiered stacks of cages in
which the hens were kept. There was a
deep concrete pit underneath the cages
which could be cleaned by access through
two doors provided for this purpose. The
house, approximately 156 feet by 36 feet,
was stated to be specially designed to
ensure a controlled environment with
thermostatically controlled heating and
lighting. Fans were located to blow air
around the inside of the house and extract
harmful ammonia fumes.
It was contended on behalf of the
company that the hen house in its entirety
was an apparatus or device designed
specially for the purpose of egg produc-
tion; that the house was as much
necessary for the purpose of the egg
production as was the equipment (such as
the cages) in the house and that one could
not exist or be effective withopt the other.
It was contended by the Inspector that
the house, as distinct from the equipment
therein, was merely the setting in which
the trade of egg production was carried
on; that it was not a device or an
apparatus by which the trade was carried
on and that it was a building or shelter as
opposed to an item of plant.
At the appeal hearing, the Appeal
Commissioners determined the appeal in
favour of Revenue.
On re-hearing the Circuit Court Judge
ruled that the structure was an item of
plant and granted the 100 per cent wear
and tear allowance.
HELD in the High Court that on the
basis of the findings of fact in the Circuit
Court as recited in the Case Stated the
Circuit Court Judge was entitled to find
as he did, that the building in question
was plant within the meaning and for the
purposes of the Income Tax Acts.
S. O'Srianain, (Inspector of Taxes)
Appellant -v-Lakeview Limited Respon-
dent - High Court, 8 October. 1984 -
unreported.
CORPORATION TAX
Whether the company's business consisted
of or included the carrying on of a profes-
sion or the provision of professional
services for the purposes of section 162,
Corporation Tax Act, 1976, and, if the
company was carrying on such profession
or was providing professional services
whether the principal part of the income of
the company was derived from the carrying
on of the profession or the provision of the
professional services.
The company was a "close company"
and carried on business as an advertising
agency. The company, based on the
marketing objectives and the advertising
budget of its customers, involved itself in
the preparation of creative proposals for
the customers and also researched the
market. If its proposals were accepted by
a customer, the company would "process
the ideas" and might then utilise a range
of talents, depending on what was
required.
The company appealed against assess-
ments made in accordance with the
provisions of section 162 of the Corpora-
tion Tax Act, 1976 for the accounting
periods ended 30 April, 1977 and 30
April, 1978. The Appeal Commissioners
determined the appeals in favour of the
Revenue. At the re-hearing in the Circuit
Court the Judge decided that the
company was not carrying on a
profession nor was it providing profes-
sional services. The High Court upheld
the decision of the Circuit Court. The
High Court Judge, having reviewed the
evidence and having considered the
legislation, expressed an inability to
conclude that the inference drawn by the
Circuit Court Judge was incorrect.
P. Mac Giolla Mhaith (Inspector of Taxes),
Appellant
-v-
Brian Cronin & Associates
Ltd., Respondent - High Court. 24 July.
1984 - unreported.
INCOME TAX AND CORPORATION
PROFITS TAX
Whether advance deposits on houses
received by the company were payments on
account of trading stock the value of which
stock would fall to be reduced accordingly
for purposes of a claim for stock relief
under section 31 of the Finance Act, 1975.
Since its incorporation the company
had been engaged in the manufacture and
erection of pre-fabricated type houses
and buildings. The manufacture and
supply of each building was carried out
under a standard form of contract
supplied by the company. Under the
terms of the contract a deposit of 15 per
cent of the total house price was required
from the customer on execution of the
contract.
At the time when the customer entered
into the agreement and paid the deposit,
the company, in almost all cases, would
have had no house-building stock on
hands and the stock from which the house
was manufactured would not be acquired
by the company until shortly before it
commenced work on the house.
The total price of the house was
invoiced to the customer immediately
upon delivery of the house to the
customer's site and the customer was
given credit in the statement of account
for the amount of the deposit paid by
him.
It was contended on behalf of the
company that the deposits were not
payments on account of any trading stock
for the purpose of reducing the value of
the "trading stock" as defined in section
31(1) of the Finance Act, 1975.
The Appeal Commissioners did not
accept the company's claim. At the re-
hearing the Circuit Court Judge decided
that the deposits were not payments in
respect of trading stock.
HELD in the High Court that the
deposits should be regarded as payments
on account received by the company in
respect of trading stock and that the value
of that stock and the deposits held should
be taken into account in arriving at the
net figure on which the claim to stock
relief should be based.
P C. O'Laoghaire (Inspector of Taxes),
Appellant
-v-
C.D. Limited, Respondent)-
[1984] ILRM 196.
INCOME TAX
Income Tax, Schedule D, Case 11 —
Profession — Capital allowances —
whether the taxpayer was entitled to
xiii