HARMAN L.J. - (1.) I am authorised by Salmon L.J. to say that he concurs in the judgment I am about to deliver.
(2.) THIS appeal is concerned with those annual payments which are dealt with by sections 169 and 170 of the Income Tax Act, 1952, re -enacting the old general rules 19 and 21. Section 169 provides that where any annual payment is payable wholly out of profits or gains brought into charge to tax the payer is to be charged with the tax and may, on making the payment, deduct and retain a sum representing the amount of the tax at the standard rate for the year in which the amount payable became due. The payee is bound to suffer this and the payer is discharged of the sum represented by the deduction as if he had actually made it. Under section 170 where any such annual payment is not payable out of profits or gains brought into charge the payer must, on making the payment, deduct the amount of the tax and account for it to the Crown. The question here is whether the taxpayer company, whom I shall call 'the company,' having made deductions on making certain annual payments, is entitled to retain them under section 169 on the footing that the payments have been made out of moneys brought into charge or must, as the Crown claims, account for them under section 170. The special commissioners held the company accountable. The judge reversed that decisio : the Crown appeals.
(3.) MOST of the transactions with which this case is concerned have for me an air of total unreality. The several companies which come and go seem merely figures, dummies set up as payers or receivers of large sums of money for no apparent commercial purpose, although I can only suppose for some end concerned with taxation. No explanations were offered to the special commissioners, nor to us, of the object or effect of these transactions, which I confess to finding incomprehensible.;