Langford v Federal Commissioner of Taxation [1954] HCA 54

92 C.L.R.] OF AUSTRALIA.

[HIGH COURT OF AUSTRALIA.]

LANGFORD. ° 5 x : 5 APPELLANT ;

AND FEDERAL COMMISSIONER OF TAXATION ResPoNDENT.

Income Tax (Cth.)—Assessable income—' Proceeds of any business carried on by taxpayer" —Taxpayer successively licensed bookmaker, hotel manager and hotel proprietor —Bets placed for licensed bookmakers and on own behalf—Personal liability of taxpayer to settle all bets—Business of " punting "—Pastime— Income Tax and Social Services Contribution Assessment Act 1936-1951 (No. 27 of 1936—No. 44 of 1951), ss. 6, 25, 26.

In determining whether a taxpayer has carried on a business of betting, - the fact that he has had substantial winnings over a period of years is not conclusive.

L., who for a short period previously had been a licensed bookmaker, became an hotel manager and hotel proprietor. In each of several successive years following he had considerable betting winnings. Throughout this period, L. had placed bets with certain bookmakers for others as well as himself, and in all cases took the responsibility of settling with those bookmakers, who knew only L. in these transactions. There were about twenty-five such bookmakers in different towns in North Queensland and L. had beforehand to make arrangements with them, with the co-operation of other bookmakers who knew L. to be trustworthy, to accept the bets, which were usually made by telephone. The people for whom L, placed bets included a turf commission agent and a licensed bookmaker, both of whom were personal friends of L. L., however, did not receive commission from any of the persons for whom he placed bets, including these two, and he performed the service free of charge in order to obtain information that bets were being made in large amounts by those closely connected with the horses. Although L. had kept a full record of his betting transactions and for settling purposes adopted a method suggested by a bookmaker, he had not employed a staff to collect betting data, and had no scheme to ensure that whatever might be the racing results he would not stand to lose. L. attended race meetings only occasionally and during the relevant period was continuously engaged in his occupation