David Lowe & Sons, Ltd v Commissioners of Inland Revenue
| Jurisdiction | Scotland |
| Judgment Date | 05 January 1938 |
| Date | 05 January 1938 |
| Court | Court of Session (Inner House - First Division) |
NO. 1066-COURT OF SESSION (FIRST DIVISION)-
Income Tax, Schedule B - Occupation of land partly for husbandry and partly for market gardening - Basis of assessment - Income Tax Act, 1918 (8 & 9 Geo. V, c. 40), Schedule B, Rule 8.
The Appellant Company occupied 378 acres in three holdings, managed and worked as one unit by employees using ordinary methods of cultivation. Wheat, oats, hay, potatoes, swedes and cabbages (for stock feeding) were grown on 170 acres of the largest holding, and vegetables, which were sold wholesale, on the remaining 110 acres of that holding and on the other 98 acres. There was a definite annual rotation of crops on all the lands occupied by the Company and the vegetable crop on the largest holding was not confined to any one part of the land. On the largest holding a number of horses, cattle, pigs and poultry were kept, and on the other two holdings, which were contiguous, four horses.
On appeal by the Company against assessments under Rule 8 of Schedule B in respect of the profits derived from the occupation of the three holdings, the General Commissioners decided that the profits from the 170 acres under ordinary farm crops should be assessed upon the annual value according to the General Rules of Schedule B, and that the profits from the remaining 208 acres under vegetables should be assessed under Rule 8 of Schedule B; and they adjusted the assessments accordingly.
Held, that the Commissioners had evidence before them on which they could reach their finding and that they had made no error in law.
At meetings of the Commissioners for the General Purposes of the Income Tax for the County of East Lothian held at Haddington on 14th February and 11th December, 1936, and 8th January and 5th February, 1937, Messrs. David Lowe & Sons, Limited, having their registered office at Kirkpark, Musselburgh (hereinafter called "the Appellants") appealed against assessments to Income Tax
(a) on the sum of £1,400 made on them for the year ended 5th April, 1935, and
(b) on the sum of £1,000 made on them for the year ended 5th April, 1936,
under Rule 8 of Schedule B of the Income Tax Act, 1918, in respect of the profits derived from the occupation by them of 280 acres of land situated at Riggonhead, partly in the Parish of Gladsmuir and partly in the Parish of Tranent, all in the County of East Lothian, and also against assessments to Income Tax
(a) on the sum of £1,200 made on them for the year ended 5th April, 1935, and
(b) on the sum of £1,000 made on them for the year ended 5th April, 1936,
under the said Rule 8 in respect of the profits derived from the occupation by them of 98 acres of land situate at East Loan and Nethershot in the Parish of Prestonpans and said County of East Lothian.
I. The following facts were held proved or admitted:-
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(2) The extent of the land occupied by the Appellants in East Lothian is as follows:-
(a) Land at Riggonhead, rented from
the trustees of the late Mrs. Mary
Ann Pape
280 acres
(b) Land at East Loan, rented from
the Governors of East Lothian
Educational Trust
77 acres
(c) Land at Nethershot, rented from
Mr. David Lowe
21 acres
Total
378 acres
The Appellants have other holdings in Midlothian which were not within our jurisdiction. Mr. David Lowe, the managing director of the Appellants, who is President of the Edinburgh Market Gardeners' Association, gave evidence before us and stated that:-
(2) All the Appellants' holdings are managed and worked as one whole and not as separate and independent units.
(3) The Appellants occupy the lands of Riggonhead on an agricultural lease which expired at Martinmas, 1934, and the lands are now held on tacit relocation. In terms of the said lease the Appellants are bound to keep the lands sufficiently stocked and to cultivate, crop and manure the same in all respects according to the most approved rules of good husbandry as practised in the district, and, in the year of the expiration of the said lease, are bound to put the whole lands under the following crops:-1/4th under turnips, potatoes or other drilled green crop, 2/4ths under grain and 1/4th under hay or grass.
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(4) During the seasons 1933 and 1934 the undernoted crops were grown on the lands of Riggonhead:-
Acres.
Wheat
…
…
…
25
Oats
…
…
…
20
Grass (hay)
…
…
…
30
Potatoes (late)
…
…
…
55
Turnips (swedes)
…
…
…
30
Cabbages (for stock feeding)
…
…
…
10
170
-
(5) Vegetables and other green crops, viz.:-
Acres.
Savoys
…
…
…
…
…
40
Cabbage
…
…
…
…
…
40
Broccoli
…
…
…
…
…
10
Peas
…
…
…
…
…
5
Beetroot
…
…
…
…
…
5
Parsley
…
…
…
…
…
5
Leeks
…
…
…
…
…
5
110
280
(6) During the seasons 1933 and 1934 the whole of the land at East Loan (extending to 77 acres) and the whole of the land at Nethershot (extending to 21 acres) was occupied for the purpose of growing peas, beetroot, savoys, sprouts, parsley, onions, leeks, broccoli, lettuce and early potatoes. A detailed note of the acreage allocated to each of these crops respectively had not been kept.
(7) There is a definite annual rotation of crops on all the land occupied by the Appellants, and the vegetable crops at Riggonhead are not confined to any one part of the land.
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(8) On the lands of Riggonhead the following stock was kept and/or reared:-
Horses (used in cultivation of
the land)
9
Cattle
100 head
Pigs
100 to 200 head.
(9) There was also kept the usual farmyard poultry which were fed on the produce of the land. The cattle and pigs were purchased, fattened and sold, and were, with the horses, fed principally on the produce of the land. The manure made by the stock was applied to the land. On the land at East Loan and Nethershot there was no live-stock except four horses.
(10) The whole acreage set out in paragraph I (1) hereof was worked as one unit under one control and management by employees using ordinary methods of cultivating the ground and employing...
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...you have to be separately assessed in respect of these "'two things"", andDavid Lowe & Sons, Ltd. v. Commissioners of Inland Revenue, 21 T.C. 597, where although the question was not argued (see per Lord Carmont, at page 607) the Court of Session held that the Commissioners can apportion th......
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Bomford v Osborne (Inspector of Taxes)
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David Lowe & Sons, Ltd v Commissioners of Inland Revenue
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