Land profit ruled not taxable

Press, Volume CX, Issue 32461, 23 November 1970, Page 2

Land profit ruled not taxable

(New Zealand Press Association) WELLINGTON, November 22. The profit made by a company director, who bought five acres of land in Upper Hutt for the purposes of expanding his company’s manufacturing activities and then subdivided the land for sale, was not assessable for tax purposes, Mr Justice Roper held in a judgment delivered in the Supreme Court.

Hugo Adolf Ditmar Jansse I objected, by way of a case ‘ stated, to a tax assessment ' made by the Commissioner of Inland Revenue. I Mr D. B. Inglis appeared i for Mr Jansse, and Mr G. < Cain for the commissioner. His Honour said the ob- ' jector was clearly a business- I man of exceptional ability, i He came to New Zealand in i 1958 and began the manu- i facture of high-frequency- r welded plastic articles. To i say that his company pros- i pered would be understating the position. i The turnover rose from $12,690 in 1961 to $167,269 I by 1968. The company did, i

however, have its Achilles heel in that its fortunes were very much tied to those of the car assembly industry. The company bought the five-acre block for more expansion and began subdividing it into 18 lots. His Honour said the onus was on Mr Jansse to prove he did not acquire the property for the purpose of selling or .otherwise disposing of it, and that what he did did not amount to the carrying out of an undertaking or scheme entered into or devised for the purpose of making a profit. His Honour said he was satisfied the objector had discharged that onus.