Commissioner of Taxation (NSW) v Hardie Investments Pty Ltd [1946] HCA 56

490 HIGH COURT [1946.

(HIGH COURT OF AUSTRALIA.)

THE COMMISSIONER OF TAXATION (NEW SOUTH WALES) or APPELLANT ; RESPONDENT.

AND

LIMITED APPELLANT,

HARDIE INVESTMENTS PROPRIETARY \ : RESPONDENT.

ON APPEAL FROM THE SUPREME COURT OF NEW SOUTH WALES.

HC ora, Income Tax (N.S.W.)—Assessable income—Dividend—" Paid wholly... out 1946. of profits arising from the revaluation of assets. . .'—Valuation—Revaluation Se) —Commercial practice Special Income and Wages Tax (Management) Act

SypsEy, 1936 (.S.W.) (No. 43 of 1936), s. 2—Income Tax (Management) Act 1936

Nov. 22. (N.S.W.) (No. 41 of 1936), #8. 5, 52, 53 (c).*

Dec. 23. 'A company, for legitimate business purposes, had, over a period of years,

written down the values of certain fixed assets in its balance sheets to a figure far

ee below their true value. Subsequently the company resolved, also for legitimate aodecnaniand purposes, to write up the values of such assets to a figure still less than, but

Williams JJ, nearer to, their frue value. It was further resolved to capitalize and to

apply the greater part of the amount by which the assets were written up, in ing shareholders. The Commissioner

the issue of fully paid bonus shares to exis of Taxation claimed that the respondent, a shareholder in the company,

should have included the value of such bonus shares as were received by it

in its assessable income.

Held that the value of the bonus shares did not form part of the respondent's 3 (c) of the Income Pax

assessable income, being excluded therefrom by s. (Management) Act 1936 (N.S.W.).

Dickson v. Federal Commissioner of Taxation, (1940) 62 C.L.R. 687, applied.

Decision of the Supreme Court of New South Wales (Owen J.) affirmed.

ion 58 (0) of the Income Tax (Management) Act 1936 (N-S.W.) is identical '44 (2) (iii) of the Income Tax Assessment Act 1936-1947 (Cth.).