Melrose v Federal Commissioner of Taxation [1919] HCA 50

494 HIGH COURT

(HIGH COURT OF AUSTRALIA.]

MELROSE. . . é : 3 ; . APPELLANT;

AND.

THE FEDERAL COMMISSIONER OF TAXATION ......-. 0... | J) ]SESRONnIaa

ON APPEAL FROM THE SUPREME COURT OF SOUTH AUSTRALIA.

H. ©. or A. Income Tax—Assessment—Tacxpayer a partner in several partnerships—Total losses on

1919. one partnership exceeding total profits on others—Deduction of share of balance of

a, losses from taxpayer's income from property—Income Tax Assessment Act 1915-

ADELAIDE, 1916 (No. 34 of 1915—No. 39 of 1916), secs. 3, 18, 21, 25—Income Tax Sept. Assessment Act 1918 (No. 18 of 1918), secs. 17, 20.

Oct.

A taxpayer was a partner in three partnerships, and for the year ending 30th pee June 1916 his share of the loss from one of them was greater than his share of the profits of the other two, and his income from personal exertion was less than the amount of his net loss in respect of the three partnerships. He also had income from property.

Held, that for the purpose of assessment for Federal income tax for the year 1916-1917 the taxpayer was entitled, under the proviso to sec. 18 (2) of the Income'Vax Assessment Act 1915-1916, to deduct from his income from property the amount by which his net loss in respect of the three partnerships exceeded his income from personal exertion,

Decision of the Supreme Court of South Australia (Buchanan J.) reversed.

Appr from the Supreme Court of South Australia.

For the purpose of assessment for Federal income tax for the year 1916-1917 Alexander Melrose sent in a return of his income for the year ending 30th June 1916, from which it appeared that he was a partner in three separate firms, from the first of which a profit was

6 C.L.R.] OF AUSTRALIA.

s share was £131, and from the third a loss of which his share was £524. Apart from those businesses he had an income from personal exertion of £10, and an income from property of over £3,000. Mel- ose included the sum of his share of the profits from the two partner- hips, namely £281, in his income from property and claimed the tight to deduct from his income from personal exertion £281 of the