Jaques v Federal Commissioner of Taxation [1924] HCA 60

Pity Ns pe ' ae Gariisioner

ae

1958) fe ee" ae

328 HIGH COURT [ 1923-1924,

°

{HIGH COURT OF AUSTRALIA.]

JAQUES 4 i r : P 5 : . APPELLANT;

AND THE FEDERAL COMMISSIONER OF TAXATION ResponpEnt.

H.C. or A, Income Tax—Assessment—Deduction—Calls in mining companies—Agreement or

1923-1924, arrangement for purpose of relieving person from tax—Genuine transaction—

es Mining company—Cement works—Dominant character of company—Income

SypNEy, Tax Assessment Act 1915-1918 (No. 34 of 1915—No. 18 of 1918), secs. 18 (1) (i), Dec. 6,7,15, 53.

1993,

A company which carried on the businesses of coal mining and of cement

"ae making, having decided to reconstruct, went into voluntary liquidation,

Sypyry, and the liquidator entered into agreements with two new companies to one

Conta of which he agreed to transfer the colliery business and to the other the cement

business, the consideration to the old company being paid-up shares in the new

companies which were to be distributed among the shareholders of the old

MELBOURNE, company. After the agreements had been executed and the transaction had June 10,

ee been otherwise partly completed, for the avowed purpose of enabling the ; shareholders of the new companies to obtain under the Income Tax

Saari Assessment Act 1915-1918 deductions from their incomes in respect of calls anacs and paid, a new scheme was adopted and carried into effect under which, in

substance, the old company sold its assets to the new companies respectively for specified sums, contributing shares were issued by each of the new companies to the shareholders of the old company, and upon those contributing shares calls were made of a sufficient amount to satisfy the purchase-money, which calls were to be paid out of the shareholders? respective interests in the assets of the old company. 'The payment of the calls and of the purchase-money was effected by an exchange of cheques between the liquidator of the old company and the new companies.