Adams v Commissioners of Taxation [1909] HCA 94

Adams v Commissioners of Taxation [1909] HCA 94

The company's income during 1906 was derived entirely from the ownership or use of land subject to land tax and was therefore exempt from income tax under the law applicable at that time. The law in force for the year when the income was earned determines taxability, not later legislative changes. Consequently, for the 1907 assessment, the taxable amount is calculated according to the law as it stood in 1906, resulting in no income tax liability for the company for 1907. Further, the company is not entitled to business deductions under sec. 28 (vi.) because all income was derived from land use and not from 'business' as intended by that section.

Parties
Appellant/respondent: Ernest Henry Adams; Respondent/appellant: The Commissioners of Taxation
Jurisdiction
Australia
Judgment Date
21 April 1909
Procedural Posture
Appeals From Special Cases Stated by Court of Review and Decisions of Supreme Court of New South Wales / High Court of Australia; Judgment on Appeal
Outcome
Appeals allowed (majority); Isaacs J dissenting as to Adams v. Commissioners of Taxation. Orders for appeals accordingly.
Legal Topics
Exemption From Income Tax, Land and Income Tax Assessment, Coal Mining and Use of Land for Business Purposes, Application of Amendments to Tax Assessment, Deductions Under Taxation Statutes
Taxation Law Exemption From Income Tax Land and Income Tax Assessment Coal Mining and Use of Land for Business Purposes Application of Amendments to Tax Assessment Deductions Under Taxation Statutes

Case Brief

Summary, issues, holding and outcome

More case intelligence is available

Unlock the full research layer for this judgment.

Full judgment text Downloadable case file Legal principles 3 Authorities cited 17 Party arguments 2
Sign in to unlock

Parties

Ernest Henry Adams

Appellant/respondent

The Commissioners of Taxation

Respondent/appellant

Procedural Posture

Appeals From Special Cases Stated by Court of Review and Decisions of Supreme Court of New South Wales / High Court of Australia; Judgment on Appeal

Legal Issues

  1. 1 Whether income derived from coal mining operations on land subject to land tax is exempt from income tax under Land and Income Tax Assessment Act 1895 (N.S.W.), secs. 15, 17, 28
  2. 2 Whether under sec. 3(2) of the Land and Income Tax (Amendment) Act 1904, 'taxable income' for the preceding year should be determined by the law then in force or by the law in force in the year of assessment
  3. 3 Whether coal mining constitutes 'business' or is income derived from the 'ownership or use of land' for the purposes of deductions and exemptions

Ratio Decidendi

The company's income during 1906 was derived entirely from the ownership or use of land subject to land tax and was therefore exempt from income tax under the law applicable at that time. The law in force for the year when the income was earned determines taxability, not later legislative changes. Consequently, for the 1907 assessment, the taxable amount is calculated according to the law as it stood in 1906, resulting in no income tax liability for the company for 1907. Further, the company is not entitled to business deductions under sec. 28 (vi.) because all income was derived from land use and not from 'business' as intended by that section.

Court Disposition

Appeals allowed (majority); Isaacs J dissenting as to Adams v. Commissioners of Taxation. Orders for appeals accordingly.

Orders

  • Appeal of Adams against the Commissioners of Taxation allowed.
  • Appeal of Commissioners of Taxation against Adams allowed.