COURT OF APPEAL.

Manawatu Standard, Volume LIII, Issue 257, 27 September 1933, Page 8

COURT OF APPEAL.

INTEREST ASSESSMENT. Per Press Association. AVELLINGTON, Sept. 27. During the continuation of the Court ot Appeal case, Bryant, May, Bell and Co., Ltd., versus the Commissioner of Taxes, Mr James, the second counsel for appellant, submitted that “capital” in the taxing statements meant fixed and not circulating capital and that “interest” not deductible from assessable income meant interest on fixed and not on circulating capital. He contended that to read “interest” as meaning interest on circulating capital would lead to consequences so unjust that it would be impossible to suppose the legislature intended it to so be read. Tlie Solicitor-General, for the Commissioner of Taxes, was not called upon. The Court reserved its decision.

The Court of Appeal was considering the appeal of Bryant, May, Bell and Co., Ltd., from the order of Mr Justice MacGregor, made on July 17, 1933, confirming the assessment of the Commissioner ot Taxes on appellants’ income for the year 1930. During that year the appellant company became indebted to Messrs Bryant and May, Ltd., London, to the extent of £55,000 for goods sold and £24,764 dividends due. In view of the adverse rate of exchange tho English company agreed to postpone the payment of both sums, interest being allowed on them by tho appellant company at 6 per cent. Both sums were invested in New Zealand Government tax free 4J per cent, stock. In its return of income for the year ended March 31, 1931, the appellant company claimed to deduct from its assessable income the interest at 6 per cent, payable to tlie English company, totalling £1137 16s. As the Commissioner disallowed the deduction application was made to have a case stated for the opinion of the Supreme Court.