H.M. Advocate v. The Forth Bridge Railway Co.

Subject_1 Revenue Subject_2 Income Subject_3 Tax Subject_4 Railway Company Yielding no Profit but Paying Interest on Capital — Customs and Inland Revenue Act 1888 (51 Vict. cap. 8), sec. 24, sub-sec. 3 — Income-Tax Act (5 and 6 Vict. cap. 35), Schedule A, rule 3. Facts: The Income-Tax Act 1853, Schedule D, provides that duty shall be chargeable upon all interest, &c., not charged by virtue of any of the other schedules contained in the Act.

The Customs and Inland Revenue Act 1888, sec. 24, sub-sec. 3, provides that upon payment of interest of money, charged with income tax under Schedule D, and not payable or not wholly payable out of profits or gains brought into charge for such tax, the person by whom such interest is paid shall deduct the income-tax and account to the Revenue therefor, and such amount shall be a debt from such person to Her Majesty.

The Income-Tax Act (5 and 6 Vict. cap. 35), Schedule A, rule 3, provides that the assessment on profits made by railways shall be made on the profits of the year preceding the year of assessment.

The Income-Tax Act 1853 (16 and 17 Vict. cap. 34), Schedule D, provides “That duty shall be chargeable in respect of all interest of money, annuities, and other annual profits or gain not charged by virtue of any of the other schedules contained in the Act.”

The pursuer pleaded—“(1) The money deducted by the company in respect of income-tax on the interest actually paid by them to shareholders and debenture holders during the year ending 5th April 1889, formed forthwith a debt due to the Crown and recoverable as such. (2) The amount sued for being due and resting-owing by the company, decree ought to be given as concluded for, with expenses.”