 The justices were adamant that the proceeds to Slutzkin and the vendors were a capital sum, representing the sale of an investment.Slutzkin had arranged the company's affairs in a form that would make it desirable for the purchaser Cadiz, but what Cadiz was going to do later was not something they could know or have an interest in.The judges held section 260 could not apply because firstly a capital sale was a transaction which had no income tax consequences, and secondly because section 260 is an "annihilating" provision.