TMI Blog1948 (11) TMI 11X X X X Extracts X X X X X X X X Extracts X X X X ..... possession of any land shall be the aggregate of the following sums, that is to say - (a) a sum equal to the rent which might reasonably be expected to be payable by a tenant in occupation of the land, during the period for which possession of the land is retained in the exercise of emergency powers, under a lease granted immediately before the beginning of that period, whereby the tenant undertook to pay all usual tenants rates and taxes and to bear the cost of the repairs and insurance and the other expenses, if any, necessary to maintain the land in a state to command that rent, and (b) a sum equal to the cost of making good any damage to the land which may have occurred during the period for which possession thereof is so retained (except in so far as the damage had been made good during that period by person acting on behalf of His Majesty), no account being taken of fair wear and tear or of damage caused by war operations. Then there are other provisions which are not material to this appeal. Having fixed the sum payable under Section 2(1)(a), which is called a compensation rent, at Pound 4,940 gross, the Inspector made the statutory deduction of one-sixth from that sum, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion. All he has done, it is argued, is to alter his mind or to take a different view with regard to the law applicable to the facts and circumstances, all of which were originally before him. It is common ground that no new fact or circumstance had been ascertained by the Inspector at the time when the certified the particulars pursuant to the discovery which he said he had made. For the Crown the argument is that, on the plain reading of the section without introducing any additional words, the Inspector has discovered that a person chargeable has been undercharged, and it is immaterial whether the discovery is based on the ascertainment of the correct law applicable to the facts and circumstances or whether it is the ascertainment of some new fact or circumstance. This section has been considered in several cases, but the matter comes before this Court without any authority binding on us. I do not propose to refer to the first case which was cited in argument, namely, R. v. Kensington Income Tax Commissioners, because, in my view, the facts of that case were so entirely difference from those of the present that any observations made there with regard to the meaning to be attac ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... re must have been some fact in 1924 and 1924 which (a) was not taken into account in the estimate, and (b) would have made the estimate as an estimate in 1922 and 1923 higher. It may indicate that the appellants in 1923 and 1924 were willing to contemplate that the debt should or might increase, but I think it is merely guess work in the circumstances of this case to infer that that was because there was then reason to think the existing debt good. It seems to me the learned judge was there holding that the fact that the company in subsequent years had given further credit to those debtors was irrelevant in ascertaining whether or not the debt was a bad debt several years earlier. When one examines the case carefully, one sees that is the real foundation of his judgment, but it is true that in giving that judgment Rowlatt, J., did use language which, if applied literally to the facts of the present case, would, I think, be sufficient for counsel for the taxpayers. He said :- The real question is whether, within the meaning of Section 125, the Inspector has discovered an undercharge in the first assessment. The word discover does not, in my view, include a mere change of op ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... re properties or profits chargeable to tax which had been omitted from the first assessments. He did, I think, find out that fact. The fact is, or course, that the properties or profits were chargeable to tax; they had been omitted from the first assessments and he found that out. The only answer made to this is that they had been omitted from the first assessments, so to speak, with the sanction of the Inspector, because he, like those making the return, supposed that they were not properties or profits chargeable to tax. But of course an Inspector would have no power to sanction such an omission. He discovers, he finds out, that they are chargeable, and I have difficulty in seeing why Section 125 does not then precisely apply. I should have pointed out-that the income in question was derived from foreign possessions. That is the property which had been omitted, to which Finlay, J., was referring. The next case is one which came before this Court, British Sugar Manufacturers, Ltd. v. Harris. That was an appeal from a decision of Finlay, J. He had followed his own decision in Williams v. Grundys Trustees, and the question involved was whether a certain sum of money that had ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of any of the partners, the price to be paid for the share of such deceasing or outgoing partner or partners shall be the amount standing at his credit in the immediately preceding balance sheet but under deduction of any sums drawn out by him and with the addition of any sums paid in by him since the date of that balance sheet with progressive interest at 5 per cent per annum from the date of the balance sheet to the date when the partners interest shall cease, and a sum in lieu of profits for the same period calculated upon the assumption that the profits shall be the same as the average for the corresponding period during the immediately preceding three years and a proportion taken which is applicable to the said partners share for the period that has run since the date of the said last balance sheet. On November 19, 1935, the Special Commissioners wrote to the trustees solicitors stating that, in the opinion of the assessing commissioners, the deceased was not entitled to any share of the firms profits for the year ending April 5, 1935, and that the capital sum which became payable under the partnership agreement to his representatives did not form part of his total income a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ery which must be made is stated in alternative forms of which the first is that a personal chargeable has not delivered any statement or has not delivered a full and proper statement. There is an express finding in the case that a full and proper statement has been made. But then we have to go on and give effect to the alternative which follows : Or has not been assessed to tax, or has been under-charged. I think that, since these words must apply where the person chargeable has delivered a full and proper statement, they are apt to cover the case of a discovery of a mistake in the assessment caused by a mistake in the construction of the partnership deed or, it may be, caused by a mistake in the law applicable to such a deed, even where there has been a compete disclosure of all relevant facts upon which a correct assessment might have been based. I do not think it is stretching the word discovers to hold that it covers the finding out that an error in law has been committed in the first assessment, when it is desired to correct that by an additional assessment. Later he says :- That again seems to me rather to point to the discovery that a deduction claimed upon a true re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t be welcome to taxpayers when the provisions of Section 140 come to be considered, where the legislature is dealing with discoveries made by the taxpayer. However that may be, I base my decision on what I think is clear language of Section 125 as construed by Lord Normand in the opinion to which I have referred, and for those reasons I think this appeal fails. COHEN, L.J. - I am of the same opinion. The learned judge, Atkinson, J., based his judgment on the decision of Finlay, J., in the Grundy case and the Court of Session in the Mackinlay case. These cases are clear authorities for the conclusion which he reached, and had it not been for the Anderton case and the British Sugar Manufacturers case to which Tucker, L.J., has referred, I should have been content without more to adopt the reasoning of Lord Normand in the Mackinlay case. There are, however, observations in the Anderton case and the British Sugar Manufacturers case, which support the opposite view. The Anderton case on any view, as Finlay, J., pointed out in the Grundy case, was clearly rightly decided. The real decision in the Anderton case was that there was no evidence that the deductions then in question were wr ..... X X X X Extracts X X X X X X X X Extracts X X X X
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