- (1.) The question involved in the present case relates to a sum of Pounds 16,138 4s. 2d. which was received by the appellant company, Anglo-French Exploration Company Ltd. in the year 1949. It is right that, at the outset of my judgment, I should refer to the terms of the schedule under which the claim is made, namely, Schedule D of the Income-tax Act, 1918, which was the Act of Parliament then in force. Its terms are very familiar, but I hope I shall be excused if I recite them : "Tax under this schedule shall be charged in respect of - (a) The annual profits or gains arising or accruing - ... (iii) to any person... from any trade, profession, employment, or vocation, whether the same be respectively carried on in the United Kingdom..." I have thought it right and relevant to refer to the terms of that schedule because, in my judgment, Mr. Borneman correctly reminded us that the cases of individual persons sought to be charged under Schedule E of the Act, where the charge is "in respect of every employment of profit," do not form a safe guide to cases under Schedule D, at least as a general proposition. We must consider the correctness or otherwise of the assessment here made in the light of the language which I have read of Schedule D.
(2.) The question, so interpreted, as it is before us can be thus expressed : Does this sum of Pounds 16,000 odd represent profits or gains of the Anglo-French Exploration Company Ltd. arising from its trade ? In other words, was it a sum received by the appellant company in the ordinary course or stream of its trading operations ? The facts of the case are not in dispute, and since they are fully recited in the case stated, it is unnecessary for me to repeat the whole of the narrative. The essential facts, however, are as follows. The Anglo-French Exploration Company Ltd. - I will henceforth call it "Anglo-French" - was formed as an English company at the end of last century : its its business being that of a mining and finance company particularly concerned, according to the terms of the case stated, with seeking scope for the investment of capital in South Africa.
(3.) Among the South African companies in which Anglo-French held for many years a substantial shareholding was the Kleinfontein Estates and Township Ltd., which I will henceforth call "Kleinfontein." In that company Anglo-French held, at all relevant dates, rather less than one third of the total of its share capital which consisted of shares of 5s. od. denomination. A similar but slightly larger shareholding in Kleinfontein was at all material times held by persons who were the trustees of the late Sir George Farrar. Anglo-French and the Farrar trustees had each of them two nominee directors on the board of Kleinfontein, but in fact, the fees, which were paid to the Anglo-French nominee directors, were in turn paid over by them to Anglo-French.;