INCOME TAX CASE

Wanganui Chronicle, Volume LXXXI, Issue 19049, 28 June 1924, Page 2

INCOME TAX CASE

COWXUL AMMUNITION COMPANY. SIR ROBERT STOUTS JUDG- | MENT. AUCKLAND, June 27. Judgment was given by Sir Robert - Stout at the Supreme Court in an appeal by the Colonial Ammunition Company against an assessment for income by the Commissioner of Taxes touching a transaction in which the larger shareholders purchased the business. His Honour s:.?d that Major Whitney, as a shareholder, got control of the business and on March 4, 1921, entered into an agreement to purchase the business in New Zealand as a going concern as from December 3, 1919. The consideration was £46,-1 730. It was on this transaction I that the Commissioner sought to j charge income tax. How could it I be said that the Commissioner had I any authority to charge income taxi on this transfer of a going concern I to a part owner? Major Whitney! executed a deed of gift in which the . gifte only was paid to Cecil Arthur Whifney, as trustee, io hold on trust, and within New Zealand. The company to acquire the said business was called the new company. The Com missioner relied on the balance-sheet of the new company as proof against the old company of the agreementl made between Major Whitney and it-| self, and as proof of the value of the j property bought. The appellant j had no hand in the preparation of i this balance-sheet of the new com- I pany. Even if Cecil Whitney pre- i pared this balance-sheet how did j his acts cither as past agent of the | old company or as an officer of the i new company bind the appellant com- ! pany? His Honour allowed the ap- ’ peal with costs.