McCARROLL V. THE COMMISSIONER OF TAXATION FOR THE COMMONWEALTH OF AUSTRALIA

JUDGMENT

McCARROLL

Ve

THE COMMISSIONER OF TAXATION

OF THE COMMONWEALTH OF AUSTRALIA

WALSH J.

Ve

THE COMMISSIONER OF TAXATION OF THE COMMONWEALTE OF AUSTRALIA

In his return of income for the year ending on 30th June 1968 the appellant disclosed a taxable income of $984. A notice of assessment issued on llth June 1969 and an adjustment sheet which accompanied it showed that the respondent had added to the taxable income the sum of $2681 and had based his assessment on a taxable income of $3665. In the tax year the taxpayer had been paid part of the price of a property which he had sold in 1964 for a sum much higher than the price which he had paid for it when he bought it in 1957. The property was at Lalor not far from Thomastown and was some eleven or twelve miles from Melbourne. It was bought by the taxpayer for £11,500 and sold by him for about £38,000, The respondent, after allowing for certain costs and expenses, computed the net gain as being a little over $51,000. He treated that net gain as being taxable income. He calculated that $2681 was the amount which represented the profit component in that part of the sale price which had been received in the tax year. The taxpayer gave a notice of objection by which he objected to the inclusion of the amount of $2681 or any part of it in the taxable income. The objection was disallowed and at the request of the appellant it was treated as an appeal and forwarded to this Court.

The question for decision is whether or not

the profit formed part of the appellant's assessable income

2.

by reason of s. 26(a) of the Income Tax Assessment Act. This depends upon whether or not the property was acquired by him for the purpose of profit-making by sale. In the circumstances disclosed by the evidence I think there is no need to consider the second part of s. 26(a). Although the notice of objection raised in the alternative a question as to the amount of the profit which should have been added to the assessable income assuming that the profit was taxable, no reasons were advanced in evidence or in argument for reducing the amount fixed by the respondent.