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SALE OF TIMBER
Not Taxable Income
HIGH COURT: JUDGMENT
In an important taxation appeal to
day the High Court of Australia, com
prising the .Chief Justice, Sir Adrian
Knox, Sir Prank Gavan Duffy, Mr. Jus
tice Rich and Mr, Justice bixon, unani
mously agreed that growing timber sold
from a property was not taxable .in
come.
Mrs. Elizabeth Viola Thomson, of
Bridgetown, represented by Mr. J. P.
Dwycr, with him Mr. M. C'rawcour, ap
pealed against an order of Mr, Justice
Drayer confirming an assessment of £1440
by the Deputy Federal Commissioner of
Taxation, as income for the year ended
June 30, 1027. The amount represented
money she had received for sale of tim
ber growing on her land at Bridgetown
The High Court was asked to decide
whether the proceeds of the sale was
Income ^r realisation of capital. The'
Crown Solicitor, Mr. J, Walker, appeared
for the Deputy Federal Commissioner of
Taxation.
In unanimously allowing Mrs. Thom
Kon's appeal, with costs of all proceed
ings, against the Deputy Federal Com
missioner of Taxation, the High Court
nnintnd out that the assessment of Mrs.
Thomson's Income from her property wafs
£1440, and, according to the assessment,
she had no income from porsonal exer
tion. She took up the land in 1903,
and had no intention then of growing
or selling timber, but had used it for
grazing. It had, however, beon eaten
out by over-stocking. There was, there
fore, no question in the case of a busi
ness, trade, pursuit, or avocation, and
this the Commissioner in effect admit
ted by treating the sum in question as
income from property.
'Upon these facts.' the High Court
judgment proceeded, 'we see no reason
why the proceeds of the sale of Mmber
should be considered as Income. The
timber formed part of the asset, which
the appellant acquired when she took up
the land.' It was true that it increased
by growth, but that growth was not an
Increase in the value of the asset which
might be detached, and yet again recui
annually or periodically. It would be
contrary to facts to regard the land as
a capital asset by which timber was pro
duced with regularity as something in
the nature of a recurring profit from the
land.
'We think.' the Judgment conclude-
'the transaction, by reason of which
the sum of £1440 was received by ap
pellant, was neither more nor less than
the conversion Into money of part of
her capital, and therefore was not in
come,' t
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