TaxTMI 
TaxTMI 
1940 (4) TMI 25
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....al by the liquidator of the appellant company from an assessment to income-tax in the sum of ? 146,000 for the year ending March 31, 1936. The assessment was made under the provisions of the Ordinance of Southern Rhodesia No. 20 of 1918. It is desirable to set out some of the sections of that Ordinance:-"Section 4(1): There shall be charged, levied and collected throughout the territory, subject to such conditions and to such exemptions and abatements as are hereinafter provided, an income-tax, at the rate and calculated in the manner specified hereunder, in respect of any taxable income received by or accrued to or in favour of any person.....Section 5: For the purposes of this chapter 'gross income' means the total amount oth....
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....bricates, improves, packs, preserves or construction in whole or in part anything within this colony, and exports the same without sale prior to the export thereof, he shall be deemed to be carrying on business within this colony and to have derived from a source within this colony a proportionate part of any profit ultimately derived from the sale thereof outside of this colony. The commissioner shall have full discretion of determining such proportionate part. (c) Nothing in paragraph (b) of this sub-section shall in any way affect the generality of the term 'carrying on business' as used elsewhere in the Ordinance". Two questions arose on the appeal:-1. Was the amount assessed in respect of a receipt proved by the taxpayer t....
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.... Mr. Weatherley was appointed liquidator. The company in the short space of its existence had spent ? 2,000 in development work onthe claims in Southern Rhodesia. On February 5, 1936, the liquidator wrote to St. Swithin's company offering to sell the company's mining claims for ? 150,000 to be satisfied in fully-paid shares, an offer which St. Swithin's accepted by a letter next day. On February 28, 1936, the liquidator wrote to St. Swithin's stating that he had discovered that the company was entitled to further mining claims, and was subject to possible liabilities in respect of claims, royalties, etc., and offered in substitution for the former agreement to sell the whole undertaking of the company including ? 2,180 in ca....
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....however, strenuously urged throughout the appeal here as in South Africa that the price received was not a receipt from a source in Southern Rhodesia. The respondent, it was said, was faced with a dilemma. The contention is that this was a capital sum; if so the tax is clearly not exigible. But if it was not a capital sum it was only because it was the result of a business operation ; if so the only source is the business, and the place where the business is carried on is the source of the profit made by the business, and as there can only be one source for one business profit you have only to see where the business was carried on which earned that profit; and that place is England, where the head seat and directing power were situate and w....
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....e derived from more than one source even where the source is business. For instance, in the case of the business of a railway company whose railway is situate abroad, as in San Paulo (Brazilian) Railway Co. v. Carter#, while the English company may be assessed in England on the whole of its profits because it carries on part of its business there, yet it could not be doubted that so much of the profits of the business as were in fact earned from running the railway in Brazil were derived from exercising a business in Brazil, and still less could it be doubted that the sums received by the company in Brazil were received from a source in Brazil. In the present case their Lordships do not find it necessary to formulate a definition which will....