TaxTMI 
TaxTMI 
1941 (4) TMI 13
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....acture of some of the tinplate which it required for its ordinary work. Accordingly, in 1935, it purchased a tinplate works at Neath, known as the Eagle Tinplate Works, from Baldwins, Ltd. In the same year it formed a subsidiary company called the Eaglesbush Tinplate Works Ltd., to take over the work and the manufacture of tinplate. The Case states that it was then "recognised by the company that the starting up and management of the Eaglesbush Company would involve additional work by the respondent and by another director of the company, a Mr. Rankin." It was suggested by the respondent that he and Mr. Rankin "should receive from the company as additional remuneration for such work a percentage of profit calculated by reference to the prof....
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....kin in 1935, under which they were responsible for the management of Eaglesbush Tinplate Works on behalf of the Company, and for these additional services they were to be paid a percentage of the profits accruing to the Company as a result of the said business for the period from 1935 expiring 31st December, 1945. It was now felt that an agreement on those lines was not in the best interests of the Company, and it was decided that the Chairman see Mr. Barlow and Mr. Rankin in an endeavour to make terms for the cancellation of the agreement on the lines of a payment to cover their services up to the present, and a lump sum payment as compensation in full satisfaction of all claims for loss of their right to future remuneration from the prese....
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....ny have requested Mr. Barlow and Mr. Rankin to accept (and Mr. Barlow and Mr. Rankin are willing to accept) as remuneration for their services under the said agreement for the period down to the date of these presents the sum of GBP 500 each. And whereas the Company desires to determine the said agreement as from the date of these presents and is willing to pay to Mr. Barlow and Mr. Rankin (and Mr. Barlow and Mr. Rankin are willing to accept) the sum of GBP 4,000 each as compensation for the loss of their right to remuneration as from the date of these presents under the said agreement. Now this agreement witnesseth as follows" first, that the GBP 500 is to be paid, and in paragraph 2: "The above recited agreement is hereby determined as fr....
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....assume that whether or not Mr. Barlow was performing any of the services in connection with the Eaglesbush Company which he had performed, he was not under any obligation to do so, and that therefore, in the circumstances of this case, the GBP 4,000 which was paid to him was properly treated as compensation for loss of his office as manager of the Eaglesbush Company, which was a source of income to him and was therefore a capital asset. But Mr. Hills and the Attorney-General, in reply, have contended that there is nothing in the circumstances which I have stated, or in the documents, which in any way indicates that Mr. Barlow was not obliged to continue his services with the Metal Box Company as manager of the Eaglesbush Company, and that t....