The Gazette 1985

GAZETTE

JULY/AUGUST

1985

Recent Irish Cases

prior to the determination of that accounting period to be valued, rather it would simply be required to ascertain the amount expended.in the acquisition of that piece of property and the amount gained from its disposal. The Court HELD that Section 18 of the 1968 Act did not alter this. The artificial determination of value of land by Section 18 2(b) and 2(c)(II) becomes of immediate relevance and importance if a particular interest in land forms part of the trading stock at the opening of an accounting period. It does not follow that it is relevant nor is it required to be assessed in relation to an interest in land acquired and disposed of within the period. The Court was not satisfied this now could be altered by the provisions of Section 29 of the 1981 Act. The Court further held that a nil assessment was in error. The appropriate assessment must not be based on the artificial assessment of the cost of acquisition provided by Section 18 of the Act of 1968 but rather the calculation between the amount actually expended (if any) on the acquisition of the Lease and the amount actually received on its disposal together with any appropriate or permissible deductions or additions. M. Cronin (Inspector of Taxes) -v- Cork and County Property Company Limited - High Court (per Finlay P.), 18 July 1984 - unreported. John O'Connor PLANNING In deciding whether or not to extend the duration of a Planning Permission, a Planning Authority must consider only the matters specified in Section 4(1) of the Local Government (Planning & Develop- ment) Act 1982, and the Planning Permission sought to be extended must be the "particular permission" relating to the development. The Prosecutor (Developer) obtained Planning Permission in 1967 for a development comprising thirty-six semi- detached houses. In 1983, the Prosecutor's Architect applied, under Section 4 of the Local Government (Planning & Development) Act 1982, for an extension of the permission which was due to expire on 31 October 1983. The Respondent (Local Authority) refused the Prosecutor's application for the stated reason that the permission for thirty-six semi-detached houses was superceded by subsequent permissions for a total of eighteen detached houses on portion of the site, that these detached houses had been constructed and that due to this, the development of the site for thirty-six semi-detached houses as previously approved could not now be carried out.

The Prosecutor obtained a conditional order of Certiorari on the grounds that the reason for the Respondent's decision to refuse the application was not one specified in Section 4 of the 1982 Act and that the decision was therefore ultra vires and void. Section 4(1) of the 1982 Act is expressed in mandatory terms as follows: "On an application being made to them on that behalf, a Planning Authority shall, as regards a particular permission, extend the a p p r o p r i a te p e r i o d, by s u ch additional period as the Authority consider requisite to enable the development to which the permission relates to be completed, if, and only if, each of the following requirements is complied with: (a) The Application is in accordance with such regulations under this Act as apply to it, (b) any requirements of, or made under, such regulations are complied with as regards the application, and (c) the Authority are satisfied in

Edited by Gary Byrne, Solicitor

REVENUE Company in Voluntary Liquidation — Acquisition and Disposal of Land — Assessment to Corporation Tax — Section 18 Finance (Miscellaneous Provisions) Act, 1 9 6 8, ordinary Ac c oun t i ng Procedures to be used — distinguish between Trading and Acquisition and Disposal of land. The Company went into voluntary liquidation on 16 February, 1979. A declaration of Solvency was filed. The Company acquired a 34 year lease of a property from a Director of the Company for a rent of £2,500 per annum from 1 December, 1975. There was no fine or premium. The Company sold its interest to the other shareholder of the Company on 29 December, 1975 for £100. Could the Company claim a loss of £24,900 (i.e. £25,000 ten years capitalisation of profits less £100 sale price) under Section 18 of the Finance (Miscellaneous Provisions) Act, 1968. (This case was prior to Section 29 of the Finance Act, 1981 which substituted a new Section 18). The Circuit Court Judge held that the Company could claim the loss of £24,900 and reduced the assessment of Corpora- tion Tax to nil. A Case was stated as to whether or not the Circuit Judge was correct. Finlay P. held that the profits of any particular accounting period must be taken to consist of the difference between the receipts from the trade or business and the expenditure laid out. Their accounts must be framed consistently with the ordinary principles of commercial accounting in so far as they are applicable and in conformity with the rules of the Income Tax Acts as modified. The purpose of Sections 17 and 18 of the 1968 Act is to make applicable to trading in land, with particular problems arising from the creation of interest in land without a total disposal, the considerations applicable to the ordinary method of trading immovable goods. Therefore ordinary practices of commercial accounting would not require an interest in land acquired within an accounting period and disposed of

relation to the permission that — (i) The development to which such permission relates commenced before the expiration of the appro- priate period/s sought to be extended, and (ii) substantial works were carried out pursuant to such permission during such period and, (iii) the development will be completed within a "reason- able time."

The "appropriate period" is a limita- tion created by Section 2 of the Act on the duration of the Planning Permission. In applying for the extension of the 1967 permission and in seeking to satisfy the Respondents as to the matters referred to at sub-paragraphs (i)-(iii) of Section 4(l)(c) of the Act, the Prosecutor's Architects represented that the Development to which the particular permission related had been commenced to the extent of substantial work done, and that it could be completed within a reasonable time. On inspecting the Planning register and the site, the Respondents found that the Prosecutor had obtained three further permissions relating to portions of the same site and on foot of two of these, had constructed eighteen detached houses. HELD per Gannon J.:— Section 4(1) of the 1982 Act refers to the permission sought to be extended as "a particular permission" thus ensuring that in considering any application, the Planning Authority will deal with it on its own facts and circumstances and not as being governed by considerations given

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