The cases of Collins v The Firth-Brearley Stainless Steel
Syndicate Ltd [1925] 9TC520, (see
BIM21015) and The Rees Roturbo
Development Syndicate Ltd v Ducker [1928] 13TC366, (see
BIM21020) provide confirmation that the
scope of a trade is essentially a question of fact. Further, the
contrasting decisions illustrate how, in marginal cases, different
Commissioners can come to different conclusions on the basis of
very similar facts.
As Rowlatt J. noted, in the Rees Roturbo case at pages 381
and 382:
"… I feel very uncomfortable about the Firth-Brearley case being decided one way and this case being decided the other way - the facts are so very nearly the same. But when you have got liability to Income Tax dependent upon findings of fact and there are different tribunals who find those facts, the result of such things is unavoidable."
The courts will only overturn Commissioners conclusions on
questions of fact, if there is evidence that the Commissioners have
misdirected themselves, or the conclusion reached is not
sustainable on the facts found (Edwards v Bairstow and Harrison
[1955] 36TC207). It is for this reason that, in any disputed case,
all of the relevant facts should be fully established before the
Commissioners.
The case of The Gloucester Railway Carriage and Wagon Co Ltd
v CIR [1925] 12TC720 (see
BIM21025) illustrates that the hiring
out of trading stock, prior to sale, does not necessarily result in
the subsequent sale being on capital account. A point that is
reinforced in the case of J Bolson & Son Ltd v Farrelly [1953]
34TC161, (see
BIM21030). The latter case also
highlights the need to look beyond the description of the activity
to consider what it is that the person actually does.
The contrasting decisions in the cases of The Alianza Company
Ltd v Bell [1905] 5TC60 and 172, (see
BIM21035) and Golden Horse Shoe (New)
Ltd v Thurgood [1933] 18TC280, (see
BIM21040) also illustrate the need to
look beyond the superficial description of a trade and consider the
detail of the actual activities undertaken.
They also demonstrate that the question may turn on
relatively fine distinctions. In the Alianza case the minerals had
not been 'won from the soil', whereas in the Golden Horseshoe case
the raw material had been 'already won and gotten' and had not yet
become part of the land again.
