Scottish Australian Mining Co Ltd v Federal Commissioner of Taxation [1950] HCA 16

Appl Sons Dist Appl Cons Appl Appl, 'Statham v Wty eee Slapletonv Fry Lb ae rc, tes Federal Whitfords Federal ederal Whitfords LOL G91) 22 ee 1 eral" Grpmusioner Beach By Lud Commisioner — Cotuisioner Brody 'a Chas oF GO a ommisioner Of Taxation perio 'akation Toration" — ISOCLIR 385 Taxation « Toran S6ALIRC 240 (leaf Me Foll Grosv 7 Pl sayy y fate federal 30 (IINSTATR of Tavation : — 5 188 & Gov a7ArR HIGH COURT (1950.

THE

FEDERAL COMMISSIONER OF TAXATION

H. ©. or 1950. aad

Sypxry, May 31; Tune 1, 7.

Williams J.

(HIGH COURT OF AUSTRALIA.)

SCOTTISH AUSTRALIAN MINING)

Sf

COMPANY LIMITED ASEAN S

AND

RESPONDENT.

A. Income Tax (Cth.)—Assessable income—A ssessment—Coal-mining company—Powers

to buy and sell land—Land purchased for coal-mining operations—Coal removed

—Land—Subdivi purposes—Quaere, business of selling land—Capital asset—Profits therefrom

ed, improved and amenities provided—Sold for residential

not assessable income—Material facts—Full and true disclosure—Re-assessment —Question of fact—Question of law—Income Tax Assessment Act 1936-1943 (No. 27 of 1936—No. 10 of 1943), ss. 6, 26 (a), 170, 196.

'The memorandum of association of a company formed primarily and

essentially for the purpose of carrying on the business of coal mining, con- tained powers to sell, improve, manage, develop, turn to account or dispose of any of the company's property. Certain land, purchased by the company in 1863 for the purpose of carrying on coal-mining operations, was, after those operations by the company had ceased in 1924, sold, from time to time and other purposes, and station con-

in parcels, ab a considerable profit, for residential for which the land had been subdivided, roads and a rail structed, sites made available for schools and churches and areas set aside

for parks. Held that the company was not engaged in the business of selling land as from 1924 but was engaged in realizing a capital asset the profits from