AUSTRALIAN MACHINERY INVESTMENT CO. LTD. V. DEUPTY COMMISSIONER OF TAXATION

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IN THE HIGH COURT OF AUSTRALIA.

REASONS FOR JUDGMENT.

HE J. Green, Gort, Print, Melb. sre

AUSTRALIAN MACHINERY INVESTMENT CO, LTD.

ve

DEPUTY COMMISSIONER OF TAXATION _ORDER.

(1) Declare that the business and operation from which the appellant company derived its profit were carried out in part in Australia and in part in the United Kingdom, and that for the purposes of sec. 23(q) of the Income Tax Assessment Act 1936 the income of the company

is derived in part from sources out of Australia. |

(2) Declare that in ascertaining the profits derived from the sale of shares in the 27 Western Australian { subsidiary companies the value of the consideration. \ paid in English shares should be brought into account, and for that purpose sec. 21 of the Income Tax Assessment Act 1936 is applicable. Further declare

that the operations of the taxpayer company amounted

{ i | | to carrying on a business for the purposes of sec. oe | 28 and corresponding previous enactments, and that shares and options formed trading dock within the } meaning of that section and of section 31 and corres- |

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ponding previous enactments.

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(3) Declare that profits made from the realization of shares | in English companies and options over such shares | received as part of such consideration were derived J

: partly from a source within Australia and partly f from @ source outside Australia, and the question \

Cand what part from a source outside Australia) what part is derived from a source in Australia/is a ~ i

matter to be determined by the Commissioner subject to |

review and appeal under the provisions of the Income Tax Assessment Act 1936.

(4)

(5)

(6)

(7)

(8)

(9)

2.

Declare that from the transaction between the appellant company and the Lalla Rookf Gold Mines Ltd. carried

out in June and July 1936 the appellant company derived no profit and that in ascertaining the profit derived from the transaction with the English company Meekatharra Gold Mines Ltd. there should deducted