C. A. 1904 UNDERGROUND ELECTRIC COMPANY OF v. INLAND REVENUE COMMISSIONERS. subject-matter of the contract between the parties was one of a loan upon security makes any difference or lends itself to any suggestion that the word "debt" should have any different meaning in the case of a conveyance from that given to it in RAILWAYS the case of a mortgage, nor do I think any argument can be LONDON based on the fact that “debt " was the word to be considered in that case, and "money payable" is the expression in this case. It seems to me that the arguments which induced the Court to hold that "debt" covered a debt not payable of Collins M.R. necessity in any event, but payable only on a contingency, apply equally to the words "money payable," and I can see no virtue in the fact that one decision cited by the AttorneyGeneral was on a settlement, another on a mortgage, and a third on a combination of both a settlement and a mortgage. It is true that these different classes of instruments are dealt with in certain fasciculi of clauses in the statute, but it does not seem to me that there is any particular significance in the position of the sections which deal with these different subjectmatters. The question is the principle underlying the construction of the Act, and it seems to me that we can get at a definite principle from those cases. The principle is that the word "debt" applies to money payable whether upon a contingency or as an absolute and unconditional certainty, and this principle is equally applicable to the words in this section. It seems to me, therefore, that the words "money payable for an indefinite period" include money which may never become payable unless the particular event happens—that is, in this case, unless the amount of profits is sufficiently large to make all the preliminary payments before the obligation to pay a sum equivalent to a 3 per cent. dividend arises. Unless and until that condition is fulfilled the money will not be paid: still it is money which will become payable if that event happens, and therefore it is covered in my judgment by the wording of the section, and the duty is payable. In my opinion, therefore, this appeal succeeds. STIRLING L.J. I am of the same opinion. The question is whether this case has been brought within s. 56, sub-s. 2, of the Stamp Act. That section provides that, "Where the consideration for a conveyance on sale consists of money payable periodically for a definite period exceeding twenty years or in perpetuity or for any indefinite period not terminable with life, the conveyance is to be charged in respect of that consideration with ad valorem duty on the total amount which will or may according to the terms of sale be payable during the period of twenty years next after the day of the date of the instrument." Part of the consideration in the present case consists of a sum payable out of the profits of a company, a sum equal to a dividend of 3 per cent. in any year upon the amount for the time being paid up on such of the original ordinary share capital in the new company as shall for the time being have been issued. It has been ascertained that at the date of the agreement the original ordinary share capital had been issued, and a definite sum had been paid up. The Commissioners held that the dividend of 3 per cent. payable on that portion of the capital so paid up constituted money payable periodically either in perpetuity or for an indefinite period within the meaning of the section. I think that that conclusion was right. We start with this, that the consideration is to be payable periodically. Now it is insisted, and this is really the basis of the argument on behalf of the company, that the expression "money payable periodically" is limited to money payable absolutely; but I see nothing in the Act which compels us to arrive at that conclusion. The words seem to me capable of including money payable either absolutely or on a contingency, just as much as the word "debt" occurring in various sections of the Stamp Acts has been held to include a debt payable either certainly or upon a contingency. If that be so, there is nothing in the subsequent part of the sub-section which would narrow the meaning of the words "money payable periodically." In fact, the subsequent language is such as lends itself to the view that it includes money payable contingently as well as absolutely. I refer to the words "will or may" which were relied upon by the Attorney-General in his opening, and which, at all events, do not tend to negative the construction which was placed on the words "money payable periodically" by the Commissioners. C. A. 1904 UNDERGROUND ELECTRIC RAILWAYS COMPANY OF LONDON V. INLAND REVENUE COMMIS SIONERS. Stirling L.J. C. A. 1904 UNDER GROUND ELECTRIC In these circumstances I think that the Crown has made out its case, and the appeal ought to be allowed. MATHEW L.J. I agree for the reasons given by my learned RAILWAYS colleagues. COMPANY OF LONDON บ. INLAND REVENUE Solicitors for company: Bircham & Co. Appeal allowed. Solicitor for Commissioners: The Solicitor of Inland SIONERS. Revenue. A. M. C. A. 1904 Dec. 16. [IN THE COURT OF APPEAL.] THE ALIANZA COMPANY, LIMITED, APPELLANTS; Revenue-Income Tax-Nitrate Grounds situate Abroad--Profits and Gains- The appellants, an English company, were the owners of land in Chili containing deposits of a substance called caliche, from which they extracted by a process of manufacture nitrates and iodine for the market. When the whole of the caliche is exhausted, the land and the machinery and plant used in the manufacture would practically be of no value : Held, that in computing their profits for income tax the appellants were not entitled to deduct any yearly sum to meet the exhaustion of the caliche. Judgment of Channell J., [1904] 2 K. B. 666, affirmed. APPEAL from a judgment of Channell J., reported [1904] 2 K. B. 666, upon a case stated by Commissioners of Income Tax. The appellants are an English company incorporated under the Companies Acts and having a registered office in London. They are the owners of land at Alianza, in the Republic of Chili, with the buildings and machinery thereon, and they also own for the purposes of their business a short line of railway. The chief value of the land consists in a substance called "caliche," which is found in deposits either at or close to the surface, and in layers about six feet in depth. The caliche is dug up and taken to the works of the company, and from it are Dec. 8. Danckwerts, K.C., and Bremner, for the appellants. It must be admitted that, if these nitrate grounds were situate in this country, the appellants, as owners of them, would be subject to income tax in respect of them as property under Sched. A, under which schedule the assessment is upon the annual value of the property, and of course no deduction could be made in respect of the cost of the property. These lands, however, being situate abroad, the appellants are not assessable to income tax in respect of them under Sched. A. But, inasmuch as the appellants are an English company carrying on business in England in the sense that their business is managed and directed here, they are subject to income tax under Sched. D upon the profits of the business so carried on in accordance with the decisions in London Bank of Mexico and South America v. Apthorpe (2) and San Paulo (Brazilian) Railway v. Carter. (3) The tax having, under Sched. D, to be assessed on the net annual profits, whereas under Sched. A it is on the annual value of the property, wholly different considerations (1) [1904] 2 K. B. 666. (2) [1891] 2 Q. B. 378. (3) [1896] A. C. 31. C. A. 1904 ALIANZA COMPANY V. BELL. C. A. 1904 ALIANZA COMPANY V. BELL. apply from those which would be applicable to a mine in this |