McCauley v Federal Commissioner of Taxation [1944] HCA 18

re tees, Bik hae .,

69 C.L.R.] OF AUSTRALIA. 235

{HIGH COURT OF AUSTRALIA.]

McCAULEY . . Ei . i ss J . APPELLANT ;

AND

THE FEDERAL COMMISSIONER OF TAA" Rsroxpese, TION Z F fi P s ' A Income Tax (Oth.)—Aasessable income—Royalty—Agreement (o sell standing timber ©, or A. at a price or royalty—Income Tax Assessment Act 1936-1941 (No. 27 of 1936— jg44. No. 69 of 1941), s. 26 (f). Ww Brispane,

By an agreement in writing the owner of certain lands agreed as vendor to sell to a purchaser the right to cut and remove the standing milling timber "at or for a price or royalty of three shillings (3s,) for each and every Sypney, 'one hundred (100) superficial feet of such milling timber so cut." July 28.

June 13.

Held, by Latham C.J. and McTiernan J. (Rich J. dissenting), that the money Latham C.J, received by the owner for timber cut and removed from the land was an y,,4ich and amount received "as or by way of royalty" within the meaning of s. 26 (f) of the Income Tax Assessment Act 1936-1941, and as such should be included

in his assessable income.

APPEAL.

John Thomas McCauley appealed to the High Court from a decision of the Board of Review upholding an assessment to income tax on his income for the year ended 30th June 1941. Pursuant to s. 18 of the Judiciary Act 1903-1940 it was ordered that the appeal be argued before the Full Court.

McCauley was a dairy farmer who owned certain land on which there was growing timber. He did not acquire the land for the purpose of growing or selling timber. On 15th February 1940 he entered into a written agreement whereby he as vendor agreed to sell to one Laver as purchaser and the purchaser agreed to purchase the right to cut and remove the standing milling timber then growing on the land "at or for the price or royalty of three shillings (3s.)

1944, Ww McCaviry FEDERAL (omais SIONER OF TAXATION.