Decided on March 24,1960

Trustees Of Tollemache Settled Estates Appellant
Coughtrie (Inspector Of Taxes) Respondents


- (1.)I have asked Pearce L.J. to deliver the first judgment.
(2.)PEARCE L.J. - This case concerns the assessment of certain royalties received by the taxpayers in respect of sand-pits let by them. These royalties are admittedly covered by section 175 of the Income-tax Act, 1952, and fall to be taxed an excess rent Under Case VI of Schedule D. The Crown contend that the assessment should be made year by year on the basis of the actual receipts, subject to certain deductions. The General Commissioners adopted that view. On an appeal by the tax-payers, who contended that there must be an assessment on Schedule A principles with evidence as to value, the judge accepted their contention and remitted the case to the commissioners.
(3.)The material part of section 175 reads as follows:
"(1) If, as respects any year of assessment, the immediate lessor of a unit of assessment is entitled in respect of the unit to any rent payable under a lease or leases to which this section applies, he shall be chargeable to tax under Case VI Schedule D in respect of the excess, if any, of the amount which would have been the amount of the assessment of the unit for the purposes of Schedule A, as reduced for the purposes of collection, if the annual value of the unit had been determined (in accordance, in whatever part of the United Kingdom the unit is situated, with the provisions of Part III of this Act) by reference to that rent and the other terms of the lease or leases, over whichever is the greater of - (a) the actual amount of the assessment of the unit for the purposes of Schedule A, as reduced for the purposes of collection or (b) the amount of any rent payable by the immediate lessor in respect of the unit under any short lease or short leases."


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