9911796707
TMI Blog1963 (7) TMI 92X X X X Extracts X X X X X X X X Extracts X X X X ..... lity specified in section 161(1) of the Income Tax Act, 1952, are therefore satisfied; and by virtue of section 160 the expense in question has to be treated as a perquisite of the taxpayer's office as a director, and included in his emoluments assessable under Schedule E. Against this it is said that if the company incurs the expense primarily in its own interests and only secondarily in the interests of the director then no benefit is provided within the meaning of section 161(1). This interpretation I am unable to accept. For present purposes I see no sufficient distinction between the case of a company expending money primarily for its own benefit, and the case of a company expending money for its own benefit, which, as a by-product ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in this respect a slip has probably occurred. Although in the last resort Mr. Bucher would wish to retain the judge's decision, his real alternative argument before us has been that liability under Schedule E extends only to the sum the taxpayer would have paid out if his defence had been left to himself. Failing this he says that the liability should not exceed tax upon the sum the company would have paid for his defence if the company had no interests of its own to consider. I find this last proposition somewhat elusive, seeing that the company could not properly pay out anything if it had no interests of its own to consider. In any event, however, the true construction of these two sections leaves no room for either of Mr. Bucher ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 160, and since in this case no part if spent by the director could be described as expenses necessarily incurred by him as such, it will all fall to be taxed as emoluments of his office. There is no justification in my view for the suggestion that either the word "in" or the word "for" in section 161 somehow import the possibility of analysing the purpose or motive of the company making the expenditure. So far as the alternative suggestion is concerned, namely, that it could be said that the only benefit to the taxpayer was a saving to him of that amount of money which he would have expended if he had been left to his own resources, I cannot, for my part, accept that argument either. Suppose the case to have been that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ase, an unusual application of the section, although I claim no great familiarity with this branch of the law, and so exceptional that it would lead one to believe that such circumstances ought not to be embraced by a section such as this. As I understand the intention of these sections, it might be shortly expressed thus--to bring perquisites of employment into tax; and from that broad approach the total expenditure does not seem to me, to the extent which has been charged against this particular taxpayer, to be properly in the category of a perquisite. The facts are quite simple. It may be quite true, as counsel for the Crown put so clearly and emphatically, that within the four corners of the section are the questions to which the answe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... xtent of the benefit was a matter which appealed to the judge, and it appeals to me. I would not myself have used the language which is reflected in the order, and I doubt whether the judge intended to put it that way, either. Mr. Bucher's contention was--and it was this, I must say, which has appealed to me--that the benefit was only to the extent by which the taxpayer's pocket was relieved, and the relevant inquiry is not what the company spent but what the taxpayer might reasonably be expected to spend in his own defence, that being the amount by which he was relieved and therefore benefited. However, I am not quite satisfied that the wording of the section permits that conclusion and I am not going to dissent from the views my ..... X X X X Extracts X X X X X X X X Extracts X X X X
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