Producers' & Citizens' Co-operative Assurance Co Ltd v Commissioner of Taxation (Cth) [1956] HCA 36

High Court of Australia Webb J. Producers' & Citizens' Co-operative Assurance Co Ltd v Commissioner of Taxation (Cth) [1956] HCA 36

ORDER Appeal dismissed: assessment confirmed. Appellant to pay respondent his costs of the appeal.

Cur. adv. vult.

The following judgment was delivered by:—

July 20 Webb J.

This is an appeal under s. 197 of the Income Tax Assessment Act 1936-1948 against the disallowance by the respondent Commissioner of Taxation of an objection by the appellant company to the inclusion in the assessable income of the appellant of the sum of £49,792 11s. 3d. being the profit made by the appellant on the sale in December 1948 of a freehold property known as the Strand Building, consisting of four floors with a total area of 38,650 square feet and situated in Queen Street, Brisbane. The respondent disallowed the objection on the ground that this profit was assessable income from personal exertion. Section 6 of the Act defines "income from personal exertion" as meaning among other things "the proceeds of any business carried on by the taxpayer and any profit arising from the sale by the taxpayer of any property acquired by him for the purpose of profit-making by sale or from the carrying on or carrying out of any profit-making under taking or scheme "; and s. 26 (a) provides that assessable income shall include "profit arising from the sale by the taxpayer of any property acquired by him for the purpose of profit-making by sale, or from the carrying on or carrying out of any profit-making undertaking or scheme".

The amount of tax involved is said to be about £10,000.

The respondent allowed two other objections and issued an amended assessment, but nothing turns on that.

The appellant is registered and incorporated in New South Wales under the Companies Act 1899 of that State. Its memorandum of association provides that the objects for which the appellant is established are, among others, (1) to issue policies of life assurance or endowment or annuities or against death or injury by accident, (2) to invest the funds of the company as the directors may deem most advisable, (3) to lease sell dispose of or otherwise deal with all or any property of the company, and (4) to invest the funds of the company in or upon freehold or leasehold securities.