TMI Blog1932 (11) TMI 11X X X X Extracts X X X X X X X X Extracts X X X X ..... the question on this appeal is whether in the circumstances I will state such profits has been made. During the years 1917 and 1918 the appellants obtained the following holdings of National War Bonds:- Amount Series. Date of issue. Date when repayable. Price at which repayable. 4,000,000 1st Oct. 1917 1-10-1922 102 250,000 2nd April 1918 1-4-1923 102 2,205,000 2nd April 1918 1-4-1923 102 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ainst this contention, and their opinion has been supported, though with some hesitation, by Rowlatt, J., and the Court of Appeal. On behalf of the appellants it was plausibly argued before the House that the nature of this transaction was equivalent to the mere exchange of an item in the stock-in-trade of a trader, in which case it was contended that unless an item so taken in exchange was sold, or taken out of the business, no tax would be exigible by reason of the fact that the article taken in exchange was of greater value than that for which it was bartered. I appreciate the strength of this argument, and I am not surprised at the perplexity in which the Judges have found themselves, but the wholly different character of the busines ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rms fixed by the Goverment and investment of the proceeds, and this expression of opinion was approved in terms in this House. But from this it follows that the process of exchange of one security for another in such circumstances is the equivalent of a sale or realisation and a re-investment, and this principle must apply whether the purpose of its application is the determining the amount of accrued discount or the profit made by the original investment. The case of California Copper Syndicate v. Harris, although again the facts are different, accepts the same principle. In that case a company formed to deal in mining properties for fully paid shares in another company, and Lord Trayner stated that the profit was realised and that the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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