§ 1. If any person who is at the end of the final accounting period the owner of any trade or business proves that he has sustained a loss on the sale at any time during the period between the first day of September, nineteen hundred and twenty-one, and the thirty-first day of August, nineteen hundred and twenty-three, both inclusive (in this Part of this Schedule referred to as "the sales period"), of the whole of the trading stock in hand on the thirty-first day of August, nineteen hundred and twenty-one, the amount of the loss shall be allowed as a deduction in computing the excess profits of the final accounting period or as an addition to any deficiency for that period, as the case may be:
§ Provided that for the purpose of the foregoing provision there shall be excluded from stock in hand any stock of which a valuation at a constant price has been accepted by the Commissioners of Inland Revenue for the purposes of duty.
§ 2. For the purposes of this Part of this Schedule the amount of the loss on sales of stock shall be computed by deducting from the cost of the stock, or if the value of the stock as on the thirty-first day of August, nineteen hundred and twenty-one; is less than its cost, from that value, a sum computed in accordance with the following provisions, of this Part of this Schedule (in this Part of this Schedule referred to as "the realised sum").
§ 3. Where the quantity of any particular class of trading stock which is in hand on the thirty-first day of August, nineteen hundred and twenty-one, is not greater than the quantity of the same class of stock sold 1713 during the sales period, the realised sum shall be taken to be the sum realised on sales of stock up to the time at which the quantity of stock of that class sold first reaches the quantity of stock so in hand.
§ 4. Where the quantity of any particular class of trading stock which is in hand on the thirty-first day of August, nineteen hundred and twenty-one, exceeds the quantity of the same class of trading stock sold during the sales period the realised sum shall be taken to be the sum realised on the sales of stock of that class with the addition of an amount equal to the value as on the thirty-first day of August, nineteen hundred and twenty-three, of a quantity of stock of that class equal to the quantity by which the stock in hand exceeds the quantity of stock of the same class sold.
§ 5. For the purposes of this Part of this Schedule, trading stock sold during the sales period shall not be deemed to be of a different class from trading stock in hand on the thirty-first August, nineteen hundred and twenty-one, by reason only that the stock sold has passed through a further stage of manufacture:
§ Provided that—
- (a) Where a particular class of trading stock in hand on the thirty-first day of August, nineteen hundred and twenty-one, consists of similar stock in different stages of manufacture and the quantity sold during the sales period is less than the quantity so in hand, the quantity sold shall be deemed to consist of that part of the stock which on the thirty-first August, nineteen hundred and twenty-one, was completely or most nearly completely manufactured; and
- (b) Where the stock sold has passed through a further process of manufacture than that undergone by the stock in hand on the thirty-first day of August, nineteen hundred and twenty-one, the realised sum shall, for purposes of this Part of this Schedule, be reduced by the cost of the material and labour employed in the further process of manufacture, and the loss to be allowed under paragraph 1 of this Part of this Schedule shall, instead of being the full amount ascertained in accordance with the provisions of paragraph 2 of this Part of this Schedule, be an amount which bears to that full amount the same proportion as the amount of the cost or value, as the case may be, mentioned in the said paragraph 2 bears to the amount of that cost or value increased by the cost of the material and labour aforesaid.
§ 6. For the purposes of this Part of this Schedule where trading stock is sold during the sales period at a price less than its value at the time when the price is determined, the realised sum shall be taken to be the value at that time.
§ 7. A claim under this Part of this Schedule shall not be allowed unless the stock of the trade or business is actually taken on the 1714 thirty-first day of August, nineteen hundred and twenty-one.
§ 8. Where a trade or business has during the sales period ceased or changed ownership this Part of this Schedule shall apply as if the date of the cessation or change of ownership were substituted for the thirty-first day of August, nineteen hundred and twenty-three.