INCOME TAX CASE

Press, Volume LXXVIII, Issue 23801, 21 November 1942, Page 6

INCOME TAX CASE

GIFT MADE TO SOLDIER (P.A.) WELLINGTON, Nov. 20. The Court of Appeal has delivered Judgment in the case of Neil Melville Loulsson, of Auckland,' company director, against the Commissioner of Taxes, on a case stated under section 35 of the Land and Income Tax Act, 1923. The case relates to an assessment of income tax for the year ended March 31, 1941. The appellant was formerly a director and salaried officer of Fairbairn, Wright, Ltd., of Auckland, He went overseas in January, 1940, with the 2nd New Zealand Expeditionary Force, and has not yet returned. The company decided in October, 1939, that it would make up the difference between employees’ pay and their military pay, and during the income year, in pursuance of a resolution, paid the appellant £6ll 16s 6d as salary and £SO director.’s fee. The respondent allowed a deduction of £2OB from the assessable Income of the company, and the company paid income tax on £453 16s 6d, but In assessing the appellant's income tax the respondent determined that he was liable to pay upon the whole of the £661 16s 6d. In its decision the Court held unanimously that the payments made by Fairbairn, Wright, Ltd., to the appellant while he was a member of the forces, was not made by virtue of his employment or his holding of any office in the company, but were a gift in the nature of a personal tribute. The appeal was therefore allowed.