PRINCE V. THE COMMISSIONER OF TAXATION OF THE COMMONWEALTH OF AUSTRALIA

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PRINCE

THE COMMISSIONER OF TAXATION OF TH COMMONWEALTH OF AUSTRALIA

Judgment delivered at. MELBOURNE _ on_.MONDAY, 17TH AUGUST, 1959.

PRINCE

Ve

THE COMMISSIONER OF TAXATION

OF THE COMMONWEALTH OF AUSTRALIA

MENZIES J.

PRINCE

Ve

THE COMMISSIONER OF TAXATION OF THE COMMONWEALTH OF AUSTRALIA

The taxpayer, David Howard Prince, has lodged objections against eighteen amended assessments of income tax for the years 1940 to 1957 inclusive and each of these objections, having been disallowed by the Commissioner, has been treated as an appeal to the Court. All the appeals have been heard together. The amended assessments appealed against in this manner were based upon a betterment statement constructed by the Commissioner after an investigation of the taxpayer's affairs and which arrived at the taxpayer's net assets first on the 30%h 'June 1939 and then on each succeeding 30th June until the 30th June 1954. During this period, according to the statement prepared, the taxpayer's net assets increased fron £16,596 to £205,851. To each yearly increase in net assets, there were added items properly to be regarded as expenditure out of net income, e.g., person expenditure and capital losses, and from the total so reached there were deducted items that could not be regarded as assessable income, @ege, capital profits and concessional deductions, to reach a taxable income upon a betterment basis for each year. From this there was then deducted the income which the taxpayer returned for the year, to arrive at a figure for income under- stated. This for the period totalled £175,000 approximately. On the taxable income calculated as aforesaid, tax was assessed for each year with additional tax in respect of the income understated. What was claimed from the taxpayer was the total of these amowmts, less the tax already paid. The amended assessments increased the taxpayer's tax by £190 54394363 for Commonwealth tax for the period 1940 to 195% inclusive, and by £1,820.18.1 for State Income Tax and Unemployment Relief Tax for the years 1940 and 19#1, giving a total of £192,260.1.4.