INCOME TAX APPEAL.

Otago Daily Times, Issue 18850, 1 May 1923, Page 6

INCOME TAX APPEAL.

MAY GO TO PRIVY COUNCIL. (Feb United Pbbss Association.)

, WELLINGTON, April 30. The Court of Appeal gave judgment this morning in the case of Macfarlane v. the Commissioner of Taxes, which was argued before the court in" October last. A majority of the court, consisting 0 f the Chief Justice and' Justices Stringer and Adams, was of opinion that the appeal should be _ allowed; Justices Salmond and Hos king dissented. The result is that both assessments of the Commissioner of Taxes are cancelled. Costs were allowed appellant on the highest scale. The Solicitor-general was granted conditional leave to appeal to the Privy Council.

[The questions involved were: (1) la the Commissioner entitled to treat as income the difference between the standard value of /locks and herds (as agreed upon between the taxpayer and the Commisioncr) and the actual market value of the same flocks am! herds at the date of the taxpayer’s death? Or (2), alternatively, if the Commissioner is not so entitled, is he entitled to treat the transfer of the flocks to the beneficiaries under the taxpayer’s will as a sale or disposition within the meaning of the Land and Income Tax Act? Mr Andrews, for contended at the hearing that the Commissioner was tied to the standard value at the date of death. He dealt with the second question before the court. On the testator’s death all his properly passed as capital to the beneficiaries. They took stock in specie, and the distribution among the beneficiaries was not a sale or disposition within the meaning of the Laud and Income Tax Act. Mr Pair, for the Commissioner of Taxes, said the increase in value of the stock above the standard value was when it realised a profit or gain which was assessable for income tax purposes. In anv case, there had been a disposition or sale .of stock within the meaning of the Land and Income Tax Act.]