Prescription or administration of any liquor simply as a medicine or for medicinal purposes by or under the direction of a pharmaceutical chemist-Licensing Act 1917, s. 13 (1) (b) (S.A.). See LICENSING, col. 276.

Pre-war trade year -War-time Profits Tax Assessment Act 1917-1918, s. 16 (12) (Federal). See TAXATION, cols. 455, 456.

Procure any liquor Licensing Act 1908, s. 214 (N.Z.).-See LICENSING, col. 280.

Profession-War Time Profits Tax Assessment Act 1917-1918, s. 8 (1) (d) (Federal).— See TAXATION, col. 457.

Public place-Police Offences Act 1915, 27 (n) (Vic.).—See POLICE OFFENCES.

Public place-Gaming Act 1908, s. 2 (N.Z.). -See GAMING AND WAGERING, col. 181. Public place-Police Offences Act 1908, Part I. (N.Z.).-See POLICE OFFENCES.

Public place-Police Offences Act 1908, s. 41 (1) (N.Z.).—See POLICE OFFENCES.

Publicly exhibiting-Gaming Act 1908, s. 30 (N.Z.).—See GAMING AND WAGERING, col.

179.

Publish any translation—Imperial Copyright Act 1911, s. 1 (2).-See COPYRIGHT.

Quarry Stone Quarries Act 1910, s. 1 (N.Z.) -Stone Quarries Amendment Act 1920, s. 2r (N.Z.). See STONE QUARRIES ACT (N.Z.).

Question of law arising in the course of the reference_Arbitration Act 1915, s. 19 (Vic.). See ARBITRATION.

Receipt Sale of Goods Act 1908, s. 6. (N.Z.). See SALE OF GOODS, col. 397.

Received-Income Tax Act, 1912 No. 11, s. 9 (N.S.W.).-See TAXATION, col. 444.

Regulate Local Government Act 1915 (Vic.)-Local Government Act 1921, (Vic.)— By-law, cl. 137.-See LoCAL GOVERNMENT, col. 298.

col.

440

444

...

450

451

454

455

...

459 460

Income Tax-Assessment-Income-Exception Assignment of lease-Payment therefor Mining lease "Prospector"- Satisfaction of Commissioner-Appeal.-Sect. 14 of the Income Tax Assessment Act 1915-1921 provides that "The income of any person shall include (d) the amount of any payment received by a lessee upon the assignment or transfer of a lease to another person . . Provided that this paragraph shall not apply to the proceeds of the sale, transfer or assignment of the lease of a mining property (other than coal mining) where the Commissioner is satisfied that the lease has been sold, assigned or transferred (i) by a bona fide prospector," etc. Held, that where the Commissioner is not so satisfied, his opinion is not subject to review by the High Court. Cornell v. Deputy Federal Commissioner of Taxation ([1920] 29 C.L.R. 39) followed. A person who procures to be forfeited a mining lease of land well known to contain large deposits of iron ore and himeslf obtains a mining lease of the land comprised in that lease and of some adjoining land is not, in respect of the lease obtained by him, a 66 prospector within the meaning of the section. THOMSON V. FEDERAL COMMISSIONER OF TAXATION, 33 C.L.R. 73. [High Court.)

66

Assessment "Mining operations"-Slate quarry-Open-cut workings.-Sect. 17 of the Income Tax Assessment Act 1915-1921 makes special provisions for deductions which may be made from income derived from mining operations (other than coal mining) carried on in Australia." Held, that operations for the purpose of obtaining slate from the land in which it occurs may be "mining operations" within the meaning of s. 17, notwithstanding that the substance sought to be obtained is slate, that for the purpose of obtaining the slate the method of working adopted is by open-cut or surface workings and removing the superjacent and interjacent beds of waste material, or that the property on which the operations are conducted is described by the taxpayer as slate quarries." AUSTRALIAN SLATE QUARRIES LIMITED v. FEDERAL COMMISSIONER OF TAXATION, 33 C.L.R. 416. [High Court.]

66

Income Tax-Assessment-Option to purchase property-Agreement for sale Services

66

as

in negotiating sale-Remuneration thereforShares in company-Value of shares-Share of profits arising from sale of property— Income from personal exertion-Proceeds from property.-Sect. 3 of the Income Tax Assessment Act 1915-1918 defines "income from personal exertion or income derived by any person from personal exertion 66 income derived from sources in Australia consisting of earnings, salary, wages, commission, fees, bonuses, pensions, superannuation allowances, retiring allowances and gratuities not paid in a lump sum, allowances received in the capacity of employee, and the proceeds of any business carried on by the taxpayer either alone or as a partner with any other person, and any income from any property where the income forms part of the emolument of any office or employment of profit held by the individual." Sect. 10 (1) provides that subject to the provisions of this Act, income tax shall be levied and paid for each financial year upon the taxable income derived directly or indirectly by every taxpayer from sources within Australia during the period of twelve months ending on the thirtieth day of June preceding the financial year for which the tax is payable." A., who was the holder of an option to purchase certain property, sold his rights under the option to the B. company. In the course of negotiations for such sale to the B. company it was agreed between A. and C., who rendered certain services in negotiating for such sale, that C. should receive one-fifth of A.'s profits on such sale. In satisfaction of C'.s one-fifth share, 7,000 £1 shares in the B. company, part of the consideration for the sale, were transferred to C. Held, that the value of the shares was not an enhancement of capital arising from realization of property, but was income of C. and was assessable as income from personal exertion.' THOMAS v. FEDERAL COMMISSIONER OF TAXATION, 33 C.L.R. 256; A.L.R. 41. [High Court.]

a

30

Income tax-Assessment-Income-" Payment received by a lessee upon the assignment or transfer of a lease "-Deduction of part attributable to transfer of any "assets" belonging to lessee.-Held, that the effect of s. 14 (d) of the Income Tax Assessment Act 1915-1918, so far as it relates to payments received by a lessee upon an assignment or transfer by him of the lease, is to include in the lessee's income only so much of such payments as is not part of the consideration for the assignment or transfer of the lease itself or of the consideration for the purchase or other acquisition from the lessee of some specific property other than the lease. The taxpayer sold a station property in Queensland, which was held on a lease from the Crown, the unexpired term of which was twenty-six years, with all stock, plant, furniture, stores, etc., thereon, for £120,000, of which £60,000 was payable in instalments over a period of years. By the terms of the agreement £20,060 of the

purchase price was apportioned to the lease. Held, that no portion of the sum of £20,060 was liable to taxation as income of the taxpayer, none of it being attributable to anything but the lease itself. DALRYMPLE V. FEDERAL COMMISSIONER OF TAXATION, 34 C.L.R. 283; 30 A.L.R. 219. [High Court.)

Income tax (Federal)-Company-Shareholder-Accumulated profits-Distribution— Allotment of bonus shares.-By s. 14 (b) of the Federal Income Tax Assessment Acts 19151921, it is provided that the income of any person shall, for the purposes of the Acts, include "dividends, profits or bonus credited or paid to " any shareholder of a company. A company, having certain accumulated profits, distributed them as a bonus among its shareholders in proportion to the number of shares held by them in the company, by issuing to them certain unissued £1 shares each credited as paid up to 10s. in satisfaction of the bonus. A shareholder in the company, having been assessed to income tax in respect of his proportion of the shares, so issued, held, that the profits, having been thus allocated to the shareholders and treated in account between the company and the shareholders as at their credit, there was a sum of profits credited " to the shareholder within the meaning of s. 14 (b) assessable to income tax. The shareholder was therefore assessable to income tax in respect of the shares allotted to him at 10s. a share, and not at the market value of the shares. Commissioners of Inland Revenue v. Blott ([1921] 2 A.C. 171) distinguished. JAMES v. THE COMMISSIONER OF TAXATION, 30 A.L.R. 293. [High Court.]

"

Income tax (Federal)-Undistributed profits of company-Shareholder holding shares as trustee-Whether liable to assessment.The whole of the shares (with the exception of the four shares of the remaining statutory members) in a company stood in the company's register in the name of the appellant. The appellant in fact was beneficially entitled to three-fifths only of the shares standing in his name and, as to the remaining two fifths, he was a trustee. The company made profits during the years 1916, 1917, 1918 and 1920, but did not distribute them. The respondent claimed under the authority of the Income Tax Assessment Act, 1915-1918 (Federal), s. 16 (2) to tax the appellant in respect of the undistributed profits referable to the whole of the shares standing in his name. The respondent further contended that the whole of the shares standing in the appellant's name were, in fact, shares to which he was beneficially entitled. Held, the appellant was beneficially interested in three-fifths only of the shares in the company standing in his name, and held the remaining two-fifths of such shares as a trustee, and was liable to be assessed in respect of such three-fifths only. The object of s. 16 (2) is to provide that in the case of a company to which the section is applied, the Com

Income tax (Federal)-Objection to assessment-Sufficiency of notice-Appeal-Mandamus to Deputy Commissioner to forward appeal to Supreme Court.-Sect. 37 (1) of the Income Tax Assessment Act 1915 - 1918 provides that a taxpayer who is dissatisfied with the assessment made by the Commissioner under the Act may within thirty days after service by post of the notice of assessment, lodge an appeal in writing with the Commissioner against the assessment stating fully the reason for the objection.' Held, that a writen communication is an effective objection within that section if it is expressed in words that are reasonably calculated to convey to the understanding of the Commissior (1) that the taxpayer contends that the assessment is not in accordance with law; and (2) the grounds on which that contention is based. THE KING v. DEPUTY COMMISSIONER OF TAXATION FOR WESTERN AUS

TRALIA; Ex parte BENJAMIN COPLEY,

30 A.L.R. 86. [High Court.]

Income

Tax-Assessment-Valuation of live-stock-" Value as prescribed "-Regulations-Validity.-Held, by Knox, C.J., Isaacs, Gavan Duffy and Rich, JJ., (1) that the words value as prescribed " in the definition of value in s. 3 of the Income Tax Assessment Act 1915-1918 meant, not the true value ascertained in a prescribed manner, but an artificial or arbitrary sum which was to be deemed to be the value; (2) (Starke, J. dissenting) that for the purpose of ascertaining the value of live-stock pursuant to s. 14 (a) of the Income Tax Assessment Act 1915-1918, Statutory Rule 1918, No. 315, being invalid, the Commissioner was not entitled to rely on reg. 46 of Statutory Rule 1917, No. 280, as a prescription of value, for that regulation was itself inconsistent with the provisions of the Income Tax Assessment Act 1915-1916, under which it was made, and was not validated or adopted by the Income Tax Assessment Act 1918; and (3) that there was nothing in the Income Tax Assessment Act 1915-1918 which could be regarded as a prescription of value. Held, therefore, by Knox, C.J., Isaacs, Gavan Duffy and Rich JJ. (Starke, J. dissenting), that in ascertaining the income of a grazier under s. 14 (a) of the Income Tax Assessment Act 1915-1918 no sum could be taken into account in respect of the excess in value of live-stock owned at the end of the year of assessment over its value at the beginning of such year. CAMERON V. DEPUTY FEDERAL COMMISSIONER OF TAXATION FOR TASMANIA, 34 C.L.R 8; 30 A.L.R. 170. [High Court.]

2.-INCOME TAX (STATE).

Income tax-Salary of public officerCompulsory subscription to superannuation fund - Outgoing incurred in production of income-Public Service Superannuation Fund Act 1902, ss. 12, 18-Taxation Act 1915, ss. 4, 16, 19, 22.-The compulsory contribution made by a public officer to the Public Service Superannuation Fund under the Public Service Superannuation Fund Act 1902 is part of the officer's salary, wages, allowances or stipend within the meaning of the Taxation Act 1915, and is taxable as income. The amount deducted from the public officer's pay as contribution to the Fund is not an outgoing or expense actually incurred by him in the production of his income. Per Murray, C. J. A loss, outgoing or expense actually incurred by a taxpayer in the production of his income is a loss sustained or payment made or incurred in the course of the actual process of producing the income, and not a loss sustained or a payment to be made out of the income after it has been produced. HANNAN v. COMMISSIONER OF TAXES, 1923 S.A.S.R. 434. [South Australia.]

Taxpayer carrying on business inside and outside the State-Agent selling goods for person residing out of the State. The appellant, a resident of New Zealand, was a racehorse breeder there, who sent over to N.S.W. a consignment of horses for sale. Held, that the appellant was liable for taxation under s. 18 of the Income Tax (Management) Act, 1912 No. 11, as being a resident outside the State on whose account an agent was selling goods in the State, and not under s. 19 as a taxpayer carrying on business both inside and outside the State. STEAD V. СомMISSIONER OF TAXATION, 41 W.N. 49. [New South Wales.]

Income Tax Act, 1912 No. 11, s. 10 (g)— Exemption Officer of sea-going vessel of Royal Australian Navy.-The income of an officer on a vessel of the Royal Australian Navy, when the vessel is within State territorial waters, is not income taxable by the State. KINGSFORD-SMITH v. COMMISSIONER OF TAXATION (No. 2), 41 W.N. 50. [New South Wales.]

Income Tax Act, 1912 No. 11, s. 4—Income from property-Income from personal exertion.-Income derived from an estate and not from the management of it, althougk that estate may be thereby improved, does not become "income from personal exertion because the trustees by good management make it return more than it did before. DALTON v. COMMISSIONER OF TAXATION, 41 W.N. 49. [New South Wales.]

Income Tax Act 1912, No. 11, s. 9-Income -Profits accruing on sale during year of income-Sale on terms-Payments extending beyond year-Balance secured.-A hotel property was sold by the taxpayer upon terms, viz., a certain deposit payable immediately and balance (secured by P.N.'s, bill of sale, covenant to pay and deposit of deed), payable at intervals extending over