NSW Associated Blue-Metal Quarries Ltd v Federal Commissioner of Taxation [1956] HCA 80

High Court of Australia Kitto J. Dixon C.J. Williams and Taylor JJ. NSW Associated Blue-Metal Quarries Ltd v Federal Commissioner of Taxation

ORDER Appeal dismissed with costs.

Cur. adv. vult.

The following written judgment was delivered:—

May 3, 1955 Kitto J.

The appellant company, having been assessed to income tax upon its income derived in the year ended 30th June 1952, objected on the ground that in the making of the assessment it was entitled to, but was not given, the benefit of the application of Div. 10 of Pt. III of the Income Tax and Social Services Contribution Assessment Act 1936-1952. The objection was disallowed by the commissioner and it now comes to this Court, at the appellant's request, as an "appeal", that is to say as a proceeding in the original jurisdiction of the Court for determination of the issues raised by the disallowance.

The relevant provisions of Div. 10 must be considered in the form which they took as a result of the passing of the amending Act No. 44 of 1951 and the application of s. 16 of that Act to assessments in respect of income of the year of income which commenced on 1st July 1951 (s. 46).

Section 122 (1) provides that where a person, in connection with the carrying on by him of mining operations upon a mining property in Australia or the Territory of New Guinea for the purpose of gaining or producing assessable income, has incurred expenditure of a capital nature on necessary plant, development of the mining property or housing and welfare, an amount ascertained in accordance with the section shall be an allowable deduction in respect of the expenditure. The succeeding sub-sections provide for a spread of the expenditure over a period of years. Section 122A, however, enables a person who has incurred expenditure specified in s. 122 (1) on plant or development to elect, in the case of expenditure falling within certain descriptions, that expenditure to which the election applies shall be an allowable deduction from the assessable income of the year of income in which the expenditure was incurred. The appellant in fact elected to have the section applied "in respect of all mining plant and expenditure on development acquired or incurred during the year ended 30th June 1952".