Thomson v Deputy Federal Commissioner of Taxation [1929] HCA 18

360 HIGH COURT

H.C. or A. does not conflict with the principle stated in Hanson v. Keating (1)

sil and Lodge v. National Union Investment Co. (2), whatever may be

Lanewan said as to the jurisdiction of the Supreme Court in its equitable

Hanover, Jurisdiction, in view of the decision in David Jones Ltd. v.

stakes. (2): Consequently, the appeal should be dismissed.

Appeal dismissed with costs.

Solicitor for the appellant, W. P. Kelly, Wellington, by Maurice J. McGrath. Solicitors for the respondent, McManamey & Jelf, Dubbo, by

McLachlan, Westgarth & Co. J.B.

(1) (1844) 4 Ha, 1; 67 E.R. 537. (2) (1907) 1 Ch. 300. (3) (1927) 40 C.L.R. 357.

(HIGH COURT OF AUSTRALIA.)

THOMSON, 20) ee

AND

DEPUTY FEDERAL COMMISSIONER ; REsPONDENT.

OF TAXATION en sidatite

ON APPEAL FROM THE SUPREME COURT OF WESTERN AUSTRALIA.

H.C. or A. Income Tax (Cth.)—Assessment—Gain in the nature of income or of capital—

1929. lease—Sale of timber thereon—Income Tax Assessment Act 1922-1927 (No. 37 tatiad 1922—No. 32 of 1927), secs. 16 (d),* 23 (18)—Land Act 1898 (W.A.) (62 Vie a No. 31), sec. 68. Sept. 5, 6. : eas The proceeds of the sale of timber to be removed from land held by he Gavan Dufiy, appellant from the Crown under a conditional purchase grazing lease mess assessed by the Federal Commissioner of Taxation as income.

*The Income Tax Assessment Act or foregifts or consideration in 1922-1927 provides by sec. 16 that the nature of premiums fines or fo assessable income of any person shall demanded and given in connection include "(d) money derived by way of __ leasehold estates." royalty or bonuses, and premiums fines

43 C.L.R.] OF AUSTRALIA.

ceeds of the realization of part of her capital, and not income assessable under the Income Tax Assessment Act 1922-1927.

Appgat from the Supreme Court of Western Australia. The appellant, Elizabeth Viola Thomson, was the lessee of a grazing lease of 1,000 acres of land selected from the Crown under ordinary grazing conditions and included in the farm of her husband. It had been acquired in 1903, and had been used for agistment purposes. In 1925 the appellant and her husband entered into an agreement with a timber company to sell to the company the growing timber not less than 4 feet 6 inches round the butt at a height of 3 feet from the ground, on her property and part of the property of her husband. The company was to cut and take away the timber for five years, for which the company paid £1,800, and of this sum the Commissioner of Taxation allocated £1,400 to the appellant and assessed her for income tax on that amount as income from property for the financial year 1926-1927. An appeal by the appellant to the Supreme Court of Western Australia against this assessment was heard by Draper J., who dismissed it on the ground that the proceeds of the sale of the timber after severance were assessable as income in the same way as the proceeds of crops _ grown and sold from cultivated lands or grass consumed by sheep on agistment.