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Issues Involved:
1. Whether Akron was exercising a trade of selling tyres to persons outside the United Kingdom within the UK. 2. Whether Akron was exercising this trade through the agency of Brentford. Detailed Analysis: Issue 1: Whether Akron was exercising a trade of selling tyres to persons outside the United Kingdom within the UK. The court examined the nature of the trade conducted by Akron and whether it was exercised within the UK. The relevant provisions of the Income Tax Act 1918, particularly Schedule E, para. (1) and General Rule 5, were pivotal in this determination. These provisions stipulate that tax shall be charged on the annual profits or gains arising or accruing to any person, whether a British subject or not, from any trade exercised within the United Kingdom. The court highlighted that the trade in question involved the sale of tyres to persons outside the UK, and it was evident from the facts that the trade was exercised within the UK. The facts, as outlined in paragraphs 6 to 12 of the case stated, demonstrated that Brentford was involved in selling tyres to distributors abroad under contracts made in the UK. These tyres were manufactured and delivered in the UK, with payments also made in the UK. Jenkins L.J. summarized this effectively, noting that the contracts were made in the UK, and Brentford was selling to distributors abroad under these contracts. Issue 2: Whether Akron was exercising this trade through the agency of Brentford. The court then considered whether Akron was exercising the trade through Brentford as its agent. The Special Commissioners had found that Akron was indeed exercising the trade through Brentford, rejecting the view that Brentford was acting on its own behalf. This conclusion was based on the agreement of February 8, 1936, and the subsequent course of dealings between Akron and Brentford. The agreement set up standing arrangements where Brentford held goods at Akron's disposal and sold them on Akron's behalf, accounting to Akron for the proceeds of sales minus costs plus 5%. The court agreed with this finding, noting that the facts supported the view that Brentford was acting as Akron's agent. The goods sold belonged to Brentford, but this did not conclusively prove that Brentford was selling on its own behalf. The court referenced Weiss Biheller & Brooks Ltd. v. Farmer, emphasizing that each case must be determined based on all facts, and in this case, the facts strongly supported the Special Commissioners' view. Conclusion: The court concluded that Akron was exercising a trade within the UK through the agency of Brentford. The appeal was dismissed, and the determination of the Special Commissioners was upheld. The court found no error in the Special Commissioners' decision and agreed with their conclusion that Akron was trading in the UK through Brentford as its agent. Separate Judgments: - Lord Morton of Henryton: Agreed with the conclusions of the Special Commissioners, Harman J., and the Court of Appeal, stating that the trade was exercised within the UK and through the agency of Brentford. - Lord Radcliffe: Emphasized that the question of whether a trade is exercised within the UK is a question of fact for the Special Commissioners and supported their finding that Akron was trading in the UK through Brentford. - Lord Tucker and Lord Cohen: Both agreed with the reasons stated by their noble and learned friends and supported the dismissal of the appeal. Final Judgment: The appeal was dismissed with costs, confirming that Akron was exercising a trade within the UK through Brentford as its agent.
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