TMI Blog1941 (3) TMI 21X X X X Extracts X X X X X X X X Extracts X X X X ..... t Company introduced a company known as Motor Components (Birmingham), Ltd., to Rolls-Royce, Ltd.; and the Components Company agreed to pay commission to the respondent Company on all the aero-valves supplied by them to Rolls-Royce, Ltd. The sums so received by the respondents were brought into their profit and loss account and suffered income-tax. On 9th February, 1938, it was agreed between t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ot suggested that the contract was ultra vires, or that the sums received thereunder were not revenue receipts. But it is said they should have been assessed under Case VI and not under Case I, and that different considerations, therefore, apply. In my opinion any intra vires contract which is of a revenue nature is in the ordinary course of business. I think the phrase in the ordinary course of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ch Gent, Ltd. v. Road [1940] 81 I.T.R. Suppl. 36; 22 Tax Cas. 519). There was, however, nothing of a capital nature in this contract. No money was spent to secure it; no capital asset was acquired to carry it out; its cancellation was only an ordinary method of modifying and realising the profit to be derived from it. Reliance was also placed on certain dicta in the Court of Session in Kel ..... X X X X Extracts X X X X X X X X Extracts X X X X
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