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DzAny expenditure which is wholly, exclusively and


necessarily incurred by a person in performing the duties
of an office or employment shall be deductibleǥǥ..dz
    

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Dz business includes any „   
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DzI doubt whether the question whether in any given case a person is or is
not carrying on a trade is capable of solution by the application of logical
progression of propositions culled from decided cases. The question is , I
think one of overall impressiondz
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Dz I think the test which must be used to determine whether a venture such
as we are now considering is or is not Dzin the nature or a tradedz is whether
the operations involved in it are of the same kind, and carried on in the
same way, as those which are characteristic of ordinary trading in the line
of business in which the venture was madedz
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DzTrade involves, normally the exchange of goods or services, for reward, not of all
services, since some qualify as a profession or employment or vacation, but there
must be something which the trade offers to provide by way of business. Trade
moreover, presupposes a customer (to this too, there may be exceptions, but such is
the norm), or, as it may be expressed, trade must be bilateral Ȃ you must trade with
someonedz

DzTrade is infinitely varied, so we often find applied to it the cliché that its categories
are not closed. Of course they are not; but this does not mean that the concept of
trade is without limits so that any activity which yields an advantage, however
indirect can be brought within the net of taxdz

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DzThe word trade is no doubt capable of bearing a variety of


meanings according to the context in which it is used. In its
most restricted sense it means the buying and selling of good;
in a slightly wider sense; it includes the buying and selling of
land; there is no reason to exclude, in an appropriate context,
the buying and selling of choses in action. It is commonly
usedǥ. to denote operations of a commercial character by
which the trader provides the customer for reward some kind
of goods or servicesdz

  
 


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DzIt is quite immaterial that the particular method of carrying on the trade involved the
making of a false declaration to the Customs authorities or giving bribes to persons in
America. In my opinion, these are entirely irrelevant considerations. When it is
established that a trade has existed for a year, the question is whether it realised a profit
as ascertained under the rules of the statute. It is quite in vain for the person who has
realised the profit to prove that he made it by cheating of fraudulent trading, or to
attempt to contend that the profit he has earned ought to escape chargeability because
he might have been convicted of a breach of the law. During the discussion a question
was raised as to whether the profits or gains of a burglar were subject to tax. Obviously
not, because burglary is not a trade or business; but if a trader committed a
housebreaking and stole his rivalǯs order book and, from its information, was able to
increase the profits of his own business, I have no doubt that these profits are subject to
tax. It is, in my opinion, absurd to suppose that honest gains are charged to tax and
dishonest gains escape. To hold otherwise would involve a plain breach of the rules of
the statute, which require the full amount of the profits to be taxes and merely put a
premium on dishonest trading. The burglar and the swindler, who carry on a trade or
business for profit, are as liable to tax as an honest business man, and, in addition, they
get their deserts elsewheredz

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? DzAny expenditure or loss shall be deductibleǥǥ to the
extent to which it is exclusively incurred in the
production of gross incomeǥ..dz
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DzMiss Mallalieu thought only of the requirements of her profession when she first bought (as
a capital expense) her wardrobe of subdued clothing and, no doubt, as and when she replaced
items or sent them to the launderers or the cleaners she would, if asked, have repeated that
she was maintaining her wardrobe because of those requirements. It is the natural way that
anyone incurring such expenditure would think and speak. But she needed clothes to travel to
work and clothes to wear at work, and I think it is inescapable that one object, though not a
conscious motive, was the provision of the clothing that she needed as a human being. I reject
the notion that the object of a taxpayer is inevitably limited to the particular conscious
motive in mind at the moment of expenditure. Of course the motive of which the taxpayer is
conscious is of vital significance, but it is not inevitably the only object which the
Commissioners are entitled to find to exist. In my opinion the Commissioners were not only
entitled to reach the conclusion that the taxpayerǯs object was both to serve the purposes of
her profession and also to serve her personal purposes, but I myself would have found it
impossible to reach any other conclusion.dz
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 0 it might have been sound business decision to write off the debts, it is
not so far tax purposes.dz
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DzWhere an expenditure is made, not only once and for all,
but with a view to bringing into existence an asset or an
advantage for the enduring benefit of a tradeǥ..there is a
very good reason (in the absence of special circumstances
leading to an opposite conclusion) for treating such an
expenditure as attributable not to revenue but to capital.dz
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ord Cave)
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