Eisner v Commissioner of Taxation (Cth)

High Court of Australia Walsh, J. Eisner v Commissioner of Taxation (Cth)

ORDER Order Appeal allowed. Amended assessment of 5 January 1966 set aside. Respondent to pay the costs of the appellant of the appeal. Usual order in relation to the exhibits. Walsh, J

In his return of income for the year which ended on 30 June 1959 the appellant, Moses Eisner, showed as his income a salary of £5000 paid by Arcos Products Pty Ltd and certain dividends. Deductions which were allowed left a taxable income of £3768. In March 1960 tax was assessed on that income. But on 5 January 1966 an amended assessment was issued, upon a taxable income increased by £40,302, which was described as profit from sale of land at Elizabeth Bay. The appellant disputes that that sum or any part of it was properly included in his assessable income for the year in question. He bought land in May and June 1958 and he resold in December 1958 at a much higher price. But he says that no part of what he received was income. The respondent Commissioner contends that there was a profit which was income according to ordinary concepts and that there was a profit which was properly included in the assessable income by force of each of the branches of s 26(a) of the Income Tax Assessment Act 1936-1959 (Com.) (the Act).

A great deal of evidence was put before me. I think it would not be useful to attempt to review fully all the details of the evidence and all the submissions made concerning discrepancies or improbabilities contained in it. I think that the decision of the appeal depends upon the question whether or not the property was acquired by the appellant "for the purpose of profit-making by sale". As will appear, I do not accept the alternative claims made on behalf of the respondent. The appellant has sworn that the property was not acquired for the purpose of profit-making by sale. I propose to refer to the aspects of the evidence appearing to me to be of most importance as providing support for his claim or as casting doubt on it. It will be necessary to refer also to some questions of law as to the construction and effect of the relevant provisions of the Act and as to the admissibility and the use which might properly be made of some portions of the evidence.