NO DEDUCTION

Evening Post, Volume CXI, Issue 78, 2 April 1931, Page 3

NO DEDUCTION

TAX ASSESSMENT APPEAL! ,

FARMERS1 INSTITUTE CASE

Reserved judgment of the Court of Appeal was delivered by Mr. Justice Smith, yesterday afternoon in the case on appeal from the decision of the CliieE Justice (Sic Michael Myers), which involved conßidera* tion of whether under section 83 of th« Land and Income Tax Act, 1923, the Dominion Farmers' Institute, Ltd., was entitled to a certain deduction from the tax assessment of the Commissioner of Taxes for thfe years ending 30th April, 1927, and 30tli April, 1928, in respect of then vacant land adjoining the Dominion Farmers' Building at the corner, of Ballance and Featherston streets. The Court dismissed the appeal, with costs. '' The company contended that the_ vacant land was being actually used by it exclusively for the purpose of deriving rents, royalties, and other profits, and solely foe the purpose of its business, and that,it was entitled to the exemption of 5 per cent. It was asserted that the capital value as on the two pieces of land must be added together for the purpose of tax assessment. The respondent claimed that the land.was being held by the company as vacant land with a view to building upon it in the future and letting the buildings erected, , and was not being actually used by the taxpayer exclusively for, the-purpnse of deriving rent, royalties, or other profits, or for the purposed his business, and was not- entitled to the exemption. ■ The decision of the Court of Appeal was that the two pieces of property must be dealt with separately. A separate deduction must be made from each separate amount of assessable income. The residua then became part of the taxable income. The statute did'not require that the deduction must be made from the total assessable income of the taxpayer. On the contrary the .-terms of section 83 of the Land and Income Tax Act, 1923, required that the deduction shall be made from, that,portion of the assessable income which was derived from the actual and exclusive use of, the land for the purposes specified. At the hearing of the appeal, Mr. A, Gray, K.C., with him Mr. N. A. Foden* appeared for the appellant, and the Solid." tor-General' (Mr. A. Fair, X.0.) for th* respondent.