Commissioner of Taxation (Cth) v Becker [1952] HCA 77

High Court of Australia Fullagar J. Dixon C.J. Webb and Kitto JJ. Commissioner of Taxation (Cth) v Becker [1952] HCA 77

ORDER Appeal dismissed with costs.

Cur. adv. vult.

Oct. 8, 1951 Fullagar J . delivered the following written judgment:—

This is an appeal against an assessment to tax in respect of income derived during the year ended 30th June 1949. The relevant facts are simple and are not in dispute.

In April 1943 the taxpayer purchased a large area of land in South Australia near the Victorian border. Part of the land was freehold, and part held under perpetual lease. It was not acquired for the purpose of profit-making by sale. The land was of poor quality and low productivity, but at a later date it was discovered, as a result of experiments conducted by the C.S.I.R.O., that it could, by the addition of certain "trace elements", be made much more productive and consequently of much greater value. By the year 1948 the taxpayer, by utilising this discovery, had developed a part of the land and had found that this part was as much as he could effectively handle and continue to develop. For this reason, and also because he desired further capital for the further development of this part, he decided to sell the remainder of the land if he could obtain a satisfactory price for it.

Up to September 1948 the price at which land could be sold in Australia was controlled under the National Security (Economic Organization) Regulations, and thereafter it was similarly controlled in South Australia under the Prices Act 1948. Under the Act, as under the regulations, it was not lawful for any person to purchase any land without the consent of a prescribed authority. It was the State Act which was in force at the time which is actually material for the purposes of the present case. It is not necessary to set out, or even to summarise, the relevant provisions either of the Act or of the regulations. It is enough to say that, under the Act, the consent of the prescribed authority was not to be expected if the purchase price of the sale of any land was in excess of the "fair and reasonable price for the land as at the 10th February 1942". The taxpayer accordingly employed two valuers to value as at 10th February 1942 the land which he wished to sell. The value given by one valuer was £12,248, and the value given by the other £10,935. Strictly speaking, I do not think that there is before me any evidence of the actual value of the land as at 10th February 1942: I think the only evidence is that the taxpayer obtained these two valuations. This, however, is, I think, of no importance.