Income Tax (Management) Act 1928 (NSW)

INCOME TAX (MANAGEMENT)

ACT.

Act No. 35, 1928.

An Act to provide for the assessment and col­ lection of a tax on incomes, and for pur­ poses consequent thereon or incidental

thereto; and to amend the Income Tax

(Management) Act, 1912, and the Co-opera­ tion Acts, 1923-1928, and certain other

Acts. [Assented to, 14th December, 1928.]

J" } E it enacted by the King's Most Excellent Majesty, 3

by and with the advice and consent of the Legis­ lative Council and Legislative Assembly of New South Wales in Parliament assembled, and by the authority of tiie same, as follows :—

P A R T I.

PRELIMINARY.

1. This Act may be cited as the " Income Tax (Management) Act, 1928."

the Commissioner in lieu of such year.

2 . The Income Tax (Management) Act, 1912, as amended by subsequent Acts, shall, subject to the amendments made therein by sections twenty-nine, fifty-three, and sixty-six, and subsection four of section eighty-nine of this Act, continue in force for all purposes in connection with income tax payable. in respect of the income which has been received prior to the year ended on the thirtieth day of June, one thou­ sand nine hundred and twenty-eight, or prior to such other period as may be or may have been accepted by

(1) All existing rules, regulations and forms made or prescribed under the Income Tax (Management) Act, 1912, as amended by subsequent Acts, or continuing in force by virtue of such Act, shall continue in force and shall apply to proceedings under this Act, so far as such rules, regulations and forms may be applicable until rules, regulations and forms arc made and prescribed under this Act.

3 .

(2) All notices given and returns made during the vear one thousand nine hundred and twenty-eight, under the Income Tax (Management) Act, 1912, as amended by subsequent Acts in respect of income for the year ended on the thirtieth day of June, one thousand nine hundred and twenty-eight, shall (without prejudice to the power of the Commissioner to give any notices which may be given or require any returns which may be required in respect of income for such year under this Act) be deemed to have been made or given also under this Act.

4 . I n this Act, unless the context requires another meaning,—

" A g e n t " includes every person who in the State for or on behalf of any person out of the State (in this paragraph called " the principal") holds or has the control, receipt, or disposal of any money belonging to the principal, and every person declared by the Commissioner to be an agent or the sole agent for any person for the purposes of this Act, and also includes sub-agent.

"Agricul tural pu r su i t " includes

culture, poultry farming, bee farming, and the horticulture, viti­

growth of fruit, vegetables and the like.

"Assessable income" means the gross income after excluding all income which is exempt from income tax.

"Assessment" means the ascertainment of the amount of any taxable income, and also means the ascertainment of the amount of tax imposed thereon.

"Assistant Commissioner" means the Assistant Commissioner of Taxation.

" Business "

" Business" includes any profession, trade, employ­ ment, vocation or calling.

" Commissioner " means the Commissioner of

Taxation.

" Company" includes all bodies or associations, corporate or unineorporate, but does not include partnerships.

" Co-operative Society " means a co-operative socieiy registered under the Co-operation Acts, 1923-1928.
"Div idend" includes profit and bonus and bonus share, whether declared or dealt with by the company issuing the bonus share as capital or not, except to the extent to which a bonus share represents a writing-up or revaluation of assets without disposal thereof, or the capitali­ zation of profits derived from the sale of capital assets, if such profits were not liable to income tax under this or the previous Act.

" Foreign Company " means a company, not being a New South Wales company.

" Income " means income derived or deemed to be derived directly or indirectly from any source in the State' or in respect of which tax is otherwise expressly made payable under this Act and includes interest upon money secured by the mortgage of any property in the State. " Income derived from personal exertion " means

income consisting of earnings, salaries, wages, commission, fees, bonuses, pensions, super­ annuation allowances, retiring allowances, and

gratuities, allowances received in the capacity

of employee, and the proceeds of any business carried on by the taxpayer either alone or as a partner with any other person, and any income from any property where the income forms part of the emoluments of any office or em­ ployment of-profit held by the individual, but does not include interest, unless the taxpayer's principal business consists of the lending of money or unless the interest is received in respect of a trade debt, and does not include rents and dividends.

"Inonne

" Income derived from proper ty" means all in­ come not being income derived from personal exertion.

" Income tax " means the income tax imposed as such by any Act as assessed under this Act.

" Income year " means the year beginning on the first day of July and ending on the thirtieth day of June (or such other period as may be accepted by the Commissioner) during which the income in question was derived.

" L e a s e " includes sublease.

"L iqu ida to r " includes the person who whether or

not appointed as liquidator is the person required by law to carry out the winding-up of a company.

" Mortgage " includes any charge, lien, or encum­ brance to secure the repayment of money.

" Mutual life assurance company" means a life assurance company none of the divisible profits of which are payable to persons other than policy-holders.

" Net income " means the assessable income less all deductions allowable under this Act except the statutory deductions allowed under sub­ section three of section nineteen.

" New South Wales Company" means a company of which the head office or the principal place of business is in New South Wales ; or a com­ pany incorporated under the Companies Act, 1899, or any other Act of the Parliament of New South Wales, wherever its head office or

principal place of business may be.

" Non-resident person " means a person whose usual
or principal place of abode is not in the State.
" Par tnership" means an association of persons
carrying on business as partners or in receipt

of income jointly, but does not include a

company.

" Person " includes a company.
"Prescr ibed" means prescribed by this Act or by

any rules or regulations made or in force under this Act, or the Income Tax (Management) Act, 1912, as amended by subsequent Acts.

" Previous

" Previous A c t " means the Income Tax (Manage­
ment) Act, 1912,as amended by subsequent Acts.
" Resident person " means a person whose usual or
principal place of abode is in the State, and
includes a public officer of the State who is
absent in the performance of his duty,or the wife

of such officer absent from the State with him.

" T a x " means income tax.

" Taxable income" means the amount of assessable

income remaining after all the deductions
allowed by this Act have been made.

"Taxpaye r " means every person or company deriving income whether on his own behalf or on behalf of another.

" the Cour t " means the Court of Review.
" the State " means the State of New South "Wales.

" t h i s A c t " or " t h e previous A c t " include the

regulations in force thereunder.

" Trustee " in addition to every person appointed or constituted trustee by act of parties, by order, or declaration of a court, or by operation of law, includes—

(a)	an executor or administrator, guardian, committee, receiver, or liquidator; and
(b)	every person having or taking upon himself the administration or control of income affected by any express or implied trust, or acting in any fiduciary capacity, or having the possession,

control, or management of the income

of a person under any legal or other
disability.

PART

P A R T I I .

ADMINISTRATION.

5 . (1) For the due administration of this Act and the previous Act, the Governor may, subject to the Public Service Act, 1902, as amended by subsequent Acts, appoint a Commissioner of Taxation, who may sue and be sued by that name.

(2) All references to the Commissioner of Tax­ ation in the previous Act, and the rules and regulations in force thereunder, shall be read and understood as referring to the Commissioner of Taxation appointed under this Act.

(3) (a) The Governor may, subject to the Public Service Act, 1902, as amended by subsequent Acts, appoint an Assistant Commissioner of Taxation.

(b) Such other persons may be appointed under the said Act as may be deemed necessary for the carrying out of this Act and the previous Act.

(4) In the event of the absence, incapacity, or suspension of the Commissioner, his powers, duties, and functions may be exercised and performed during such absence, incapacity, or suspension, by the Assistant Commissioner, and in the event of the absence, incapacity, or suspension of both the Commissioner and the Assistant Commissioner, the powers, duties, and functions of the Commissioner may be exercised and performed during the absence, incapacity, or sus­ pension of the Commissioner and Assistant Commis­	sioner by an Acting Commissioner appointed by the	Governor.
(5) The Commissioner may, by writing under his hand, delegate to the Assistant Commissioner, or any other person, any powers, duties, and functions conferred or imposed upon him by this Act, or the previous Act, or the rules or regulations in force under anv of such Acts (except this power of delegation). Every delega­ tion under this section shall be revocable at will, but any delegation shall not prevent the exercise of any power, duty, or function by the Commissioner.

(6)

(6) A. notification in the Gazette that any person has been appointed as Commissioner, Assistant Com­ missioner, Acting Commissioner, or other person for the purpose of this Act, or the previous Act, shall he conclusive evidence of such appointment.

(7) Where in or under this Act or the previous Act the exercise of any power or the discharge of any duty or function by the Commissioner or the operation of any provision of this Act or the previous Act is dependent upon the opinion, belief, or state of mind of the Commissioner in relation to any matter, that power, duty, or function, may be exercised or discharged by the Assistant Commissioner when authorised to act by a delegation as aforesaid or during the absence, in­ capacity, or suspension of the Commissioner, or by the Acting Commissioner during the absence, incapacity, or suspension of the Commissioner and the Assistant Com­ missioner, or that provision may operate (as the case may be) upon the opinion, belief, or state of mind in relation to that matter of the Assistant Commissioner when so authorised to act, or during the absence, in­ capacity, or suspension of the Commissioner or upon the opinion, belief, or state of mind in relation to that matter of the Acting Commissioner during the absence, incapacity, or suspension of the Commissioner and Assistant Commissioner.

6 . (1) Every Commissioner, Assistant Commissioner, and Acting Commissioner and other person appointed to act in the administration of this Act shall, before acting in the execution of his office, take and subscribe before

may be prescribed.	a justice of the peace such oath of fidelity and secrecy as	(2) Every such person who without lawful excuse makes a record of or reveals any matter or thing which has come to his knowledge in his official capacity shall be guilty of a misdemeanour, and shall be liable to ' imprisonment for any term not exceeding two years, with or without hard labour.
(3) If any such person acts in the execution of his office before he has taken the prescribed oath, he shall be liable to a penalty of not less than ten and not more than one hundred pounds.

(4)

(4) Any person who has been an officer or who has performed any duly under this Act or the regulations in force under this Act, or under the previous Act, or the regulations in force thereunder, and who reveals any information acquired by him in the performance of any duty under any such Act or regulations, to any person other than a person to whom he is authorised by the Commissioner to communicate it, shall be guilty of a misdemeanour, and shall be liable to imprisonment for any term not exceeding two years, with or without hard labour.

(5) An officer shall not be required to produce in any court any return, assessment, or notice of assessment, or to divulge or communicate to any court any matter or tiling coming under his notice in the performance of his duties under this Act, or the previous Act, except as may be necessary for the purpose of carrying into effect the provisions of any such Act.

(G) Notwithstanding anything contained in this section the Commissioner, Assistant Commissioner, or Acting Commissioner may communicate any matter which comes to his knowledge in the performance of his official duties to the Commissioner of Stamp Duties, or to the officer or authority administering any Act of the Commonwealth or of any State relating to income tax, stamp duties, succession duties, or estate duties who is authorised by law to afford like information to the Commissioner.

7 . Nothing in this Act shall affect the operation or continuance of the Income Tax (Commonwealth) Collection Act, 1923. P A R T

P A R T I I I .

LIABILITY TO TAXATION.

8 . (1) Subject to the provisions of this Act, income tax at such rates as may be fixed by any Act shall be paid to the Commissioner in respect of the taxable income derived by any person during every income year to which this Act applies.

(2) The first assessment of income tax under this Act shall be in respect of the income of the year ended on the thirtieth day of June, one thousand nine hundred and twenty-eight, or such other period as may be accepted by the Commissioner in lieu thereof, and subsequent assessments shall be in respect of the income for each succeeding income year.

(3) Where a company is wound up, or an individual person dies or ceases to be a taxpayer, in any year, and such company or person has under the provisions of the previous Act been assessed on the income of the whole or part of any year a second time, and no adjustment in regard to such second assessment has previously been made, the Commissioner shall make such adjustment as is just .

(4) Income shall be deemed to have been derived by any person within the meaning of this Act, although it has not actually been paid over to him, but has been credited in account or reinvested or accumulated or capitalised or carried to any reserve, sinking fund, or insurance fund howsoever designated, or otherwise dealt with on his behalf or as he directs.

(5) In any case in which the whole of the income in respect of a transaction which occurred during an income year prior to the income year which ended on the thirtieth day of June, one thousand nine hundred and twenty-eight, was not liable to assessment prior to such last-mentioned year, the Commissioner may assess income for the same income year or years and in the same manner in which and as it would have been assessable had the previous Act continued to apply.

(6) Income shall for the purpose of this Act in­
clude interest on fixed deposits effected in the Territory

of the Seat of Government of the Commonwealth by

persons

persons resident in the State or by New South Wales companies or by any other company carrying on busi­ ness in the State and effecting such deposit in connection with or as an operation of its business so carried on.

9 . (1) Where the income of a taxpayer (other than a company) is derived wholly or in part from any agricultural, dairying, or pastoral pursuit carried on by the taxpayer, the following provisions shall be applied to so much of the taxable income as is derived from any such pursuits :—

(a)

In assessments of tax payable upon income derived in each income year subject to assess­ ment under this Act, the rate to be applied to the taxable income so derived in the income year shall bo calculated under the Act by which the rates of income tax are declared as if the taxable income so derived by the tax­ payer were an amount equal to the average of the taxable income so derived by the taxpayer in the years (in this section called " average years ") beginning with and including the first average year and ending with and including the income year.

(b)

The first average year shall be the fourth year before the income year, except in the cases in which the subsequent provisions of this section provide for the first average year being a later year. An income year, subject to assessment under the previous Act, shall be capable of being taken as a first or subsequent average year.

(e)

Where the taxable income so derived of the taxpayer for the year which would otherwise be the first average year was greater than his taxable income so derived of the next suc­ ceeding year, the first average year shall he the first year, subsequent to the first-mentioned year in which the taxable income so derived of the taxpayer was less than his taxable income so derived in the next subsequent year :

Provided that this paragraph shall not apply to the assessment of a taxpayer who has been

assessed

assessed for any previous year at an average rate determined under this section or section

9A of the previous Act.

(d)

Any year in which the taxpayer was not carrying on any such pursuit shall not he counted as a first average year, but any year in which the deductions allowable in his assessment to a taxpayer carrying on any such pursuit left no taxable income derived there­ from shall be capable of being an average year, and if an average year, shall be taken into account in ascertaining the average taxable income derived from any such pursuit. I n such a case the excess of allowable deductions over income in any average year shall be taken into account in calculating the average, but only to the, extent to which such excess of deduc­ tions is greater than the net income, if any, of the taxpayer derived in that year otherwise than from any such pursuit.

(e)

Where there are not at least two average years for the purpose of calculating the rate under the foregoing provisions of this section, the rate of tax to be applied in any year to the taxable income of a taxpayer shall be the rate applicable in that year under the Act by which the rates of income tax are declared to a taxable income of that amount.

(2) Where such a taxpayer derives taxable income
otherwise than from any such agricultural, dairying, or

pastoral pursuit, the rate of tax on such other taxable

total taxable income equal to an amount arrived at by	income shall be the rate which would be applicable to a
adding to such other taxable income the average income (if any), or if paragraph (e) of subsection one applies, the actual taxable income from any such agricultural, dairying, or pastoral pursuit.
(3) For the purposes of this section, a person whose sole business consists of buying and selling live­ stock shall not to the extent of such business be deemed to be carrying on an agricultural, dairying or pastoral pursuit.

1 0 . (1) The following incomes, revenues, and funds shall be exempt from income tax—

(a) the salary of the Governor of New South Wales;

(b)	the official salaries of foreign consuls and the trade commissioners of any part of the British Dominions ;
(c)	the revenues of municipal corporations or of local or public authorities ;
(d)	the incomes of mutual life assurance com­ panies not being income from investments or income from rent, or income assessable under section twelve ;

(e) the profits of the Government Savings Bank;

(f)	the incomes of societies registered under the Friendly Societies Act, 1912 ;
(g)	the income of a trade union or of an association of employers or employees registered under any Act of the Commonwealth or the State relating to the settlement of industrial disputes ;
(h)	the income of any ecclesiastical, charitable, or educational institution of a public character, whether supported wholly or partly by grants from the Consolidated Revenue or no t ;

(i)   the income of a fund established by any will or instrument of trust for public charitable purposes if the Commissioner is satisfied that the particular fund is being applied to the purpose for which it was established ;

(j) the incomes of Starr-Bowkett building societies;

(k)	the income of any society or association not
the individual members thereof, established for carried on for the purpose of profit or gain to

the purpose of promoting the development of the agricultural, pastoral, horticultural, viti- cultural, stock-raising, manufacturing, or industrial resources of Australia ;

(1) the income of any society or association established for musical purposes, or for the encouragement of music, art, science, or litera­ ture, and not carried on for the purpose of profit or gain to the individual members

thereof;

(m)

(m)	the income of any other company, society, or association which does not derive profit or gain out of transactions with persons other than their members, and which does not carry on business for purposes of profit or gain except as regards any income from investments or income from rent or income assessable under section twelve;
(n)	pensions paid by the Government of the Com­ monwealth under the Australian Soldiers' Repatriation Act, 1920-1921;
(o)	the remuneration paid by the Government of the Commonwealth or of a State to a person residing outside Australia for expert advice to that Government or as a member of a Royal Commission;
(p)	the incomes of persons derived in their capacity of—

(i)  representatives of an association or club established in any country for the control of any outdoor athletic sport or game in that country visiting Australia for the purpose of engaging in contests in Australia;

(ii)   representatives of any Government visiting Australia in an official capacity, and members of tbe entourage of any such representative;

(iii) representatives of any society or associa­ religious or philanthropic purposes visiting Australia for the purpose of attending international or empire conferences or for the purpose of carrying on investigation or research for such society or association ;	tion established for educational, scientific,
(iv)	representatives of the press outside Aus­ tralia visiting Australia for the purpose of reporting the proceedings relating to any of the matters referred to in (i), (ii), and (iii); or

(v)

(v)  visitors to Australia whose visit, in the opinion of the Colonial Treasurer, is primarily or principally directed to assisting the Commonwealth Government or a State Government in the settlement or development of Australia;

(q)

the income derived by a resident of any territory or island in the Pacific Ocean which is governed, controlled, or held under mandate by the Government of any part of the British Empire or by a condominium in which any part of the British Empire is concerned, from the sale in the State by or on behalf of that person of produce of the territory or island of which he is a resident, provided that the purchase of the produce in the State is made for the purpose of export for sale outside Australia and that the Commissioner is satisfied, that the produce has been exported without unnecessary delay.

(r)

interest from bonds, debentures, stock and other securities issued by the Government of New South Wales, the Commissioners of the Government Savings Bank of New South. Wales or the Government of the Common­ wealth of Australia;

Provided that this exemption shall not extend to interest from any such security in cases where by this Act, or any Act of the Parliament of the Commonwealth or the State,

the payment of income tax. interest on any such security is made liable to

(2) The exemptions in this section shall not—

(i)   extend to the salaries, wages, allowances, or pensions of persons employed by any such corporation, company, authority, union, society, institution, or person specified therein, although the same may be paid wholly or in part out of the income, revenues, or funds so exempt; or

(ii) exempt any such corporation, company,

authority, union, society, institution, or person,

from

from furnishing any returns or information which may be required by the Commissioner; or

(iii)  exempt any person from including in his returns such information as may be prescribed or as may be required by the Commissioner;

1 1 . The assessable income of any person shall (with­ out in any way limiting the meaning of the words) include—

(a) profits derived from any trade or business and converted into stock-in-trade or added to the capital of or in any way invested in the trade or business :

Provided that for the purpose of computing such profits the value of all live-stock (not being live stock used as beasts of burden or as working beasts) and trading stock (not being live stock) not disposed of at the beginning or end of the income year shall be taken into account.

For the purposes of this paragraph " value " means—

(i)   in the case of trading stock (not being live stock) the actual cost price or market selling value of each article of trading stock or the price at which each article of trading stock can be replaced, at the option of the person in respect of each article :

Provided that the value adopted in rela­ tion to any article of trading stock as the value of that article as at the end of the income year in which the income was derived (including for the purposes of this proviso the last year of income under the previous Act) shall for the purposes of the assessment of the person's income derived in the next income year be deemed to be the value of that article as at the commencement of that next

income vear ;

(ii)

(ii)  in the case of live stock (not being live stock vised as beasts of burden or as working beasts) the value per head which the person with the consent of the Com­ missioner adopted for the purposes of his return as the value at the end of the last year of income under the previous Act or where bv reason of there being no such return, or for anv other reason there is no such value, then such value per head as any person adopts with the approval of the Commissioner, or in default of agreement between such person and the Commissioner, then such value per head as is in the opinion of the Commissioner just and reasonable. The value per head so fixed as herein mentioned, shall be adopted for the beginning and end of every income year to which this Act applies, unless and until altered with the consent of the Commissioner.

Notwithstanding anything contained in this paragraph an owner of live-stock who has made or who may after the passing of this Act make an election under the provisions of paragraph (aa) of section sixteen of the Commonwealth Income Tax Assessment Act, 1922-1928, to omit natural increase from his returns under that Act until disposed of (if the election is operative in any year to which this Act apjdies) may elect to omit from the account required by

this paragraph the value of all natural increase of live-stock owned by him, and born during the income year, and shall not be assessed for income tax in respect of that natural increase except to the extent to which he has disposed of it. The owner of the live-stock shall give notice of his election in writing, in the prescribed form signed by him, and deliver it at the office of the Commissioner

on

on or before the prescribed date. The elec­ tion specified in any notice given in pur­ suance of this paragraph shall be irrevoc­ able and shall apply to the assessment of income derived in the income year in respect of •which the election is made and to assessments for all subsequent income years. The proceeds from the sale of any live-stock acquired by any person by the natural increase of his stock, which natural increase the person has elected to omit from the account required by this para­ graph shall be returned as income in the year in which that natural increase is sold. If any such natural increase is disposed of otherwise than by way of sale, an amount equal to the market value of natural increase so disposed of shall be returned as income in the income year in which the disposal is effected.

(b) in the case of a member or shareholder (other than a company) of—-

(i)   a company which derives income from a source in the State ; or

(ii)   a company which is a shareholder in a

company which derives income or

dividends from a source in the State,

all dividends (but not including a reversionary bonus issued on a policy of life assurance) credited, paid, or. distributed to the member

or shareholder from any profit derived from

any source by the company :

Provided that—

(i)   where a company derives income from a source in the State, and from a source outside the State, a taxpayer shall be taxable on so much of the dividend as bears to the whole dividend the same proportion that the profits derived by the company from a source in the State bear to the total profits of the company; and

(ii)

(ii)   if a company, which lias derived income from the bonds, debentures, stock, or other securities mentioned in paragraph (r) of subsection one of section ten, pays in any year any portion of that income in dividends to its shareholders, the exemp­ tion under that paragraph shall (so long as it continues to apply) extend to the proportion of the dividend for that year which has been paid out of such income :

Provided further that notwithstanding any other provision of this Act where a dividend is paid wholly and exclusively out of profits derived from the sale of capital assets, the member or shareholder shall not,if the company was not liable to income tax in respect of such profits under this or a previous Act, be liable to tax on that dividend :

Provided further that any such member or shareholder shall be entitled to a rebate in his assessment of the lesser of the two following amounts:—

(i)  the sum which bears the same proportion to the tax payable by him on his income derived from property as the amount of his income from dividends which is in­ cluded in his taxable income derived from property bears to his total taxable income derived from property ; or

(ii)	the proportion of the tax paid by the

company (under this Act or the previous Act or any Act repealed by the previous Act) attributable to the dividends included in the taxable income of the taxpayer.

For the purposes of this proviso, in arriving at the amount of dividends included in a tax­ payer's taxable income, deductions allowable under subsections two ami three of section nineteen shall be treated as deductible in the first place from the income, if any, other than that from dividends :

Provided

Provided further that increased tax shall not he imposed on a taxpayer by the operation of the preceding provisions of this paragraph (b), except to the extent to which—

(ia) the amount of the tax that would be assessed on the income of the tax­ payer, including the dividends, as if they were not dividends, but were other income from property

exceeds—

(iia) the amount obtained by adding to the proportion of the tax paid by the company mentioned in subparagraph (ii) of the second proviso of this para­ graph (b) the tax that would be assessed on the taxpayer's income, excluding the dividends.

(c)	beneficial interests in income derived under any will, settlement, deed of gift, or instrument
of t rus t ;
(d)	money derived by way of royalty or bonus, and premiums, fines or foregifts or consideration in the nature of premiums, fines or foregifts demanded and given in connection with lease­ hold estates (including the goodwill of any business carried on on the l and) ;

(e) money received as an annuity;

(f)	the amount or value of any consideration demanded and given in connection with a
less the amount, if any, by which the value of right to remove standing timber from land the land is or will be diminished by the

removal of the t imber;

(g) amounts expended by a lessee under an obligation in an agreement in writing (not exceeding the sum, if any, specified in the agreement) with the landlord to the extent to which the landlord's interest in the property is increased in value, and for which the tenant has no right to reimbursement by the landlord:

Provided

Provided that amounts so expended whether before or after the commencement of this Act shall be apportioned over the period of the tenancy unexpired at the date of such expenditure and returned by the landlord as income accordingly.

ill) the annual rental value to him of premises or quarters provided rent free by his employer ;

(i)   five per centum of the capital amount of a retiring allowance or gratuity (not being an amount paid to a director of a company) paid in a lump sum ;

(j)	all allowances, gratuities (except retiring allowances or gratuities paid in lump sums otherwise than to a director of a company), bonuses and premiums, whether in money or goods or sustenance or land allowed, given or granted to a person in respect of or for or in relation directly or indirectly, to any employ­ ment or service of such person to the amount of the value of such allowances, gratuities, bonuses and premiums respectively ;
(k)	the proceeds derived from the sale (whether compulsory or otherwise and whether for the purpose of putting an end to a business or otherwise) of—
(a) the whole or part of the trading stock of any business ;
(b) any standing crop ; and (c all live-stock forming part of the assets of

any business (not being live-stock which in the opinion of the Commissioner were	ordinarily used by the person as beasts of
burden or as working beasts) :

Provided that—

(i)   this paragraph shall not apply to the proceeds derived from the sale of any live-stock which, in the opinion of the Commissioner, were ordinarily7 used by

the person for breeding purposes and were sold by that person for the purpose of putting an end to the whole of a

business

business carried on by him, or in con­ sequence of the acquisition or resump­ tion of land used by him for a business carried on by him, under the provisions of any law of the Commonwealth or the State which contains a provision for the compulsory acquisition or resumption of land, except that, when such live-stock includes sheep in the wool, there shall be included in the assessable income of that person the amount which is deter­ mined as the price or value of the wool as distinct from the sheep ;

(ii)   notwithstanding anything contained in this section or in section nineteen of this Act, no deduction shall be allowed to any person on account of live-stock sold by him in respect of which, by virtue of paragraph (i) of this proviso, no amount (other than in respect of wool) has been included in his assess­ able income; and

(iii)   for the purpose of paragraph (k) of this section, " s a l e " includes any disposition otherwise than by way of sale, and in any such case the sale price shall be deemed to be the market value of the trading stock, standing crop or live­ stock ruling on the day on which the disposition is made, and the person

amount so fixed as the sale price :

acquiring any such property shall be deemed to have purchased it at the

Provided that where any trading stock, standing crop or live-stock is sold with other assets or any such sheep which in the opinion of the Commissioner were ordinarily used for breeding purposes are sold in the wool the consideration for the sale which is attributable to the trading stock, standing crop, live­ stock, or wool shall be determined. by the Commissioner, and the amount so determined

shall

shall be deemed to be the price paid by the purchaser for the trading stock, standing crop, live-stock, or wool as the case may be ;

(1) interest credited or paid to or otherwise derived by any depositor or debenture holder of a company, and amounts derived by any member or shareholder in a company from the sale of rights to take up shares or debentures in a company;

(m)	money or consideration derived from the, granting of an option of purchase of any property;
(n)	the amount of the consideration for the transfer, assignment, cancellation, or surrender of a lease of land (including the goodwill of any business canned on on the land) less the deductions provided for in paragraphs (a), (b) and (e) of subsection three of section twelve :

Provided that —

(i)  where the lease transferred, assigned, cancelled, or surrendered was acquired by the taxpayer prior to the first day of July, one thousand nine hundred and twenty-three; or

(ii)   where the lease was transferred, as­ signed, cancelled, or surrendered after the thirtieth day of June, one thousand nine hundred and twenty-eight, and was acquired by the taxpayer during the year ended on the thirtieth day of June, one thousand nine hundred and

twenty-four; or

(iii)   where in any other case the lease transferred, assigned, cancelled, or sur­ rendered was acquired by the taxpayer before the sixth year prior to the income year in which the lease is transferred, assigned, cancelled, or surrendered,

the amount to be included as assessable income shall not be greater than the total of the amounts of depreciation in respect of the lease allowed to the taxpayer under this and the

previous Ac t : Provided

Provided further that this paragraph (n) shall not apply to the transfer or assignment of the lease of a mining property (other than coal mining) where the Commissioner is satisfied that the lease has been assigned or transferred by a bona fide prospector,

1 2 . (1) Where the proceeds of the sale during the income year by any person of any real property situated in the State are not liable to be returned as assessable income under any other provision of this Act. the net profit or gain, if any, arising from such sale shall be deemed to be assessable income of that person, if such real property was bought by him during such year or the six years next prior thereto.

" Real property " in this section means any estate or interest in land within the State, including a lease of such land and including the goodwill of any business carried on on the land.

Provided that this subsection shall not apply to—

(i)  The sale by any person of real property which was bought by him prior to the first day of July, one thousand nine hundred and twenty- three ; or

(ii)  the sale by any person after the thirtieth day of June, one thousand nine hundred and twenty- eight, of real property which was bought by him during the year ended on the thirtieth day of June, one thousand nine hundred and twenty- four; or

(iii) the sale by any person of premises owned and	solely used by him as his principal place of
abode during any period of or exceeding four years. (2) Where the proceeds of the sale during the in­

come year by any person of any personal property situated in the State are not liable to be returned as assessable income under any other provision of this Act, the net profit, if any, arising from such sale shall be deemed to be assessable income of that person if such personal property was bought by him during such year or the two years next prior thereto.

Provided

Provided that this subsection shall not apply to—

(i)   The sale by any person of personal property other than shares in any company which was bought by him prior to the first day of July , one thousand nine hundred and twenty-seven; or

(ii)   the sale by any person after the thirtieth day of June, one thousand nine hundred and twenty- eight, of personal property other than shares in any company which was bought by him during the year ended on the thirtieth day of June, one thousand nine hundred and twenty-eight; or

(iii)   the sale during the income year by any person of personal property (other than shares or securities) of an aggregate value not exceeding two hundred pounds.

(3) The amount of the net profit or gain referred to in subsections one and two hereof shall be arrived at in the following manner, namely, by deducting from the amount realised by the sale—

(a) the expenses of sale ;

(b)	the cost of the property to the vendor (less all amounts in respect of depreciation which were allowable as deductions from his assessable income under this and the previous Act ) ; and
(c)	any other expenses, including interest on borrowed money, proved to the satisfaction of the Commissioner to have been incurred in connection with the acquisition, improving and
not allowable as a deduction from the income holding of any such property, and which were of the income year or any previous income year :

Provided that any loss (ascertained in the same manner) incurred during the income year on the sale during such year of any property coming within subsection one or two shall be allowed as a deduction in arriving at the net profits or gains from sales of property coming within subsections one and two, but shall not be allowed as a deduction from income derived from any other source :

Provided

Provided further that any similar loss incurred during the two preceding income years, hut not prior to the first income year to which this Act applies, shall also he allowed as a deduction to the extent to which such loss is not set off against any similar profit in the year in which it is incurred or the succeeding year.

(4) Where in the case of any sale coming under this section the payment of the purchase price extends over a period of years so much of the consideration as would he profit if the sale were for cash shall be treated as apportioned among the income years over which the payments of the purchase price extend, and the amount of profit assessable in each income year shall be the amount which bears the same proportion to the profit to be apportioned as the amount of the payments received in the income year bears to the purchase price.
(5) The rate of tax in respect of taxable income which consists of or includes taxable income derived from any sale made after the passing of this Act to which the provisions; of subsection one or two of this section apply shall be arrived at as follows:—

The net profit or gain derived from any such sale which is included in the taxable income shall be divided by the number of years for which the taxpayer had held the property at the time of the sale, and the amount arrived at (together with the amounts similarly arrived at in respect of every other such sale the net profit or gain from which is included in the taxable income) shall be added to the taxpayer's other taxable income (if any), and the rate that would be applicable if the amount so ascertained were the taxpayer's total taxable income shall be

applied to the taxpayer's total taxable income.
(6) Where a person has bought property and
assures it otherwise than by way of sale whether by
delivery or otherwise to a person who sells it, the net
profit or gain if any arising from such sale shall be
deemed to be assessable income of the vendor under
subsection one in the case of real property and under
subsection two in the case of personal property if the

net profit or gain from such sale would have been

assessable

assessable income of the first-mentioned person under the provisions of this section had such person continued to hold the property and made such sale.

The cost to the said vendor of the property sold by him shall, for the purposes of subsection three (b) of this section, be deemed to be the price at which the said first-mentioned person bought the property less all amounts in respect of depreciation which were allowable as deductions from the assessable incomes of such person and the said vendor under this and the previous Act.

(7) Where a person who has bought real pro­ perty assures it or causes it to be assured to a company to which the provisions of section thirty-one may be applied, and he is at or about the date of the assurance substantially interested as a shareholder therein and he sells substantially the whole of his shares in such company the net profit or gain, if any, arising from such sale, shall be deemed to be assessable income of such person under subsection one of this section if, had he continued to hold such real property and had he sold the same at the time when he sold the shares, the net profit or gain on such a sale of the real property would have been deemed to be assessable income of such person under subsection one of this section.

In computing the net profit or gain arising from such sale of the shares the cost of the property to the vendor for the purposes of paragraph (b) of subsection three of this section shall be the price at which the said first- mentioned person purchased such real property less all amounts in respect of depreciation which were allowable as deductions from the assessable incomes of such person

and the said company under this and the previous Act.

(8) For the purpose of this sect ion—"Sale" includes an exchange of property and any statutory resumption, and " b o u g h t " includes in respect of shares the acquisition of shares by the issue thereof.

1 3 . Subject to the provisions of this Act, if in respect of any transaction to which this Act applies the whole or part of any consideration is paid or given otherwise than by cash, the moncy value of such consideration shall be stated by the taxpayer in his return, and if the value so stated is not accepted by the Commissioner he shall assess the same.

1 4 . (1) Subject to subsection two of this section, the interest accruing on loans raised in New South Wales after the thirty-first day of December, one thou­ sand nine hundred and twenty-three, by the Government of any country or dominion outside the Commonwealth, or by any authority constituted by or under any law of any such country or dominion, shall be subject to income tax in the same manner as if it were income derived from a source in-New South Wales.

(2) Subsection one of this section shall not apply

in relation to any interest unless either—

(a)	the interest is received directly or indirectly by a resident person or by a New South Wales company or by any other company carrying on business in the State in connection with or as an operation of its business so carried on ; or
(b)

such interest is otherwise liable to income tax (3) For the purpose of this section a loan shall

be deemed to have been raised in New South Wales if subscriptions to the loan were invited in New South Wales by public advertisement, or by the issue of a prospectus, or otherwise.
1 5 . Notwithstanding anything contained in any Act, the interest on any loan raised after the date of the coming into operation of this section, by the States or by any authority constituted by or under any State law, shall be subject to income tax and for that purpose shall be deemed to be part of the income of the respective persons to whom the interest is payable.

This section shall come into operation on a date to

be fixed by the Governor by proclamation published in
the Gazette.

1 6 . Tor the purpose of the last two preceding sec­ tions, " loan " includes a conversion loan and a loan raised for the redemption or repayment of an existing loan.

1 7 .     I n addition to any other income tax payable by

it, a company shall also pay income tax—

(a) at such rate as may be fixed by the Income Tax Act by which the rates of income tax are declared on the interest paid or credited by the

company

company to any non-resident person or foreign company on money raised by debentures of the company and used in the State, or on money lodged at interest in the State with the com­ pany ; and

(b) on interest paid or credited in respect of deben­ tures payable to bearer issued in the State or to secure money used in the State the names and addresses of the holders of which are not supplied to the Commissioner by the company as if the total amount so paid or credited were the taxable income of an individual :

1 8 .     For the purposes of the preceding section—

(a)	a company shall be entitled to deduct and retain for the use of the company from the amount payable to any of the persons referred to in paragraph (a) of such section such amount as is necessary To pay the tax which becomes due in respect of that amount ;
(b)	a company shall be entitled to deduct and retain for the use of the company from the interest payable to any person who is a holder of deben­ tures payable to bearer an amount which bears the same proportion to the amount paid by the company under paragraph (b) of such section as the interest payable to that person bears to the total interest payable in respect of those debentures;
(c)	where a company pays tax under such section on any interest, and any person includes that
income tax thereon, the amount of tax paid by interest in his return, and is liable to pay

the company in respect of that interest shall be deducted from the total tax payable by the person ;

(d)	where the Commissioner is satisfied that the holder of debentures payable to bearer is a person who is not liable to pay income tax, the Commissioner shall refund to the person entitled thereto the amount of t a x paid by the company in respect of the debentures of that person.
K	1 9 .

1 9 .     In calculating the taxable income of a taxpayer

there shall, subject to this Act, be deducted from the total assessable income derived by the taxpayer the following deductions:—

(1) (a) All losses and outgoings (including commis­ sion, discount, travelling expenses, interest and expenses and not being in the nature of losses and outgoings of capital) actually incurred in gaining or producing the assess­ able income :

(b) Rates and taxes (except income tax) imposed by Acts of the Parliament of New South "Wales or by any authority constituted by or under any such Act, and land tax levied in respect of iand situated in the State under any Act of the Parliament of the Commonwealth if such rates, taxes, and land tax were actually paid by a taxpayer during the income year, and were incurred in the production of his assessable income :

Provided that When a taxpayer receives a refund of the whole or any part of any rates or taxes allowed as a deduction under this or the previous Act, the amount of the refund shall be returned as income in the income year in which the refund is received.

(c) Sums expended by the taxpayer during the income year for repairs to or on that part

of any property' occupied for the purpose of

producing the assessable income, or from which the assessable income is derived, and for the repair of machinery, implements, and plant used by the taxpayer for the purpose of producing the assessable income;

(d) The sum actually' expended by the taxpayer during the income year for food and for rent of quarters provided for an employee who is employed exclusively in a business of the taxpayer yielding assessable income :

Provided

Provided that if the sum actually expended on such food cannot be ascertained such sum may be deducted as the Commissioner thinks just. Such sum shall not, however, be less than the amount fixed as the value of keep under any award or agreement, made under any Act of the State or the Commonwealth relating to industrial matters or disputes under which such employee is engaged after deduct­ ing therefrom the part, if any, attributable to lodging or quarters.

(e) Retiring allowances and pensions paid to employees and former employees in respect of past services in the taxpayer's business and so much of the assessable income as is set aside or paid by an employer of labour as or to a fund to provide individual per­ sonal benefits, pensions, or retiring allow­ ances for employees :

Provided that—

(i)  a deduction shall not be allowed under this paragraph (e) unless the Commissioner is satisfied that the fund has been established or the pay­ ment has been made in such a manner that the rights of the employees to receive the benefits, pensions, or retiring allowances have been fullv

secured;

(ii)  if the Commissioner is satisfied that any part of the assessable income of any person (whether an employer of labour or not) has been so set aside or paid by that person to provide individual personal benefits, pensions, or retiring allowances to employees in any business or class of business, the person setting aside or paying the sum shall be entitled to deduct i t .

(F)

(f)	Expenses incurred in relation to the obtain­ ing of an award or agreement under any Act of the Commonwealth or of the State relating to employees engaged in the tax­ payer's business.
(g)	A proportionate part of the amount paid by the taxpayer as a procuration fee or bonus in connection with money borrowed and used by him in the production of assessable income arrived at by distributing the amount so paid over the period for which the money was borrowed.
(h)	Sums paid to any bona fide industrial union of employers or employees, trade or profes­ sional association, or agricultural society approved by the Commissioner but not exceeding fifty pounds to each respectively.

(i)   Sums expended by the taxpayer on grassing grazing lands, on suckering or eradicating seedlings, noxious plants and noxious weeds, and for the destruction of noxious animals on lands owned, held or occupied by the taxpayer for the purpose of his business.

fj) The proportionate yearly sum which in the opinion of the Commissioner represents the purchase price or consideration for any annuity purchasing by the taxpayer.

(k)	Bad debts proved to be such to the satis­ faction of the Commissioner and to have by7 the taxpayer in the income year, but been incurred in and actually written off
the Commissioner may allow.a deduction for bad debts claimed in respect of any year if he is satisfied that the debts were not incurred more than six years prior to the commencement of the income year, and that the taxpayer has in any previous year included those debts as assessable income in his return :

Provided

Provided that all amounts at any time received on account of any such had debts or of any bad debts allowed as a deduction under the previous Act shall be returned as income in the income year in which the same were received.

(1) Such sum as the Commissioner may think just and reasonable as representing the diminution in value, by reason of wear and tear during the income year of any machinery, implements, and plant (includ­ ing furniture, beasts of burden and working beasts) owned and used by the taxpayer for the purpose of producing the assessable income :

Provided that the following conditions shall apply in relation to the deduction under this paragraph—•

(i)  where a deduction has been allowed under paragraph (c) of this subsection, the Commissioner shall take into consideration the sum allowed under that paragraph in determining the sum to be allowed under this paragraph;

(ii)  where a person from whose assessable income a deduction has been made under this paragraph, sells any property in respect of the depreciation of which the deduction was made,

there shall be deducted from his

assessable income of the income year in which the sale was effected the amount (if any) by which the sale price is less thair the depreciated value of the property as at the time of sale, as determined under this paragraph (1). If the sale price exceeds that depreciated value the amount of the excess shall be returned as income in the income year in which the sale was effected.

" Depreciated

" Depreciated value " shall mean the cost price of the property to the taxpayer, or -where condition (iii) hereof applies, the cost price to the first owner, less the total of the amounts of depreciation allowed under this or the previous Act or any Act repealed by the previous Act, in respect of the property to the taxpayer or to the taxpayer and the prior owner, as the case may be.

If no separate value is allocated to any property to which this paragraph applies when sold with other assets, or if such property is disposed of-
otherwise than bv sale, the Commis- sioner shall determine the amount which shall for the purposes of this condition of this paragraph be deemed to he the selling price of that property ;

(iii)  where any property in respect of which a deduction is allowable under this paragraph has been acquired (either before or after the commence­ ment of this Act) from one person by another person, the person who acquired that property shall not be entitled to any greater deduction

under this paragraph than that which would have been allowed to the person

from whom it was acquired if he had

retained it, unless the surplus over the depreciated value has been returned as income by the vendor in pursuance of condition (ii) of this paragraph, in which case the purchaser shall be entitled to a deduction for depreciation based on the cost price of the property to him :

Provided

Provided that it the Commissioner is satisfied that the purchase of the property is bona fide and not for the purpose of avoiding taxation, then, notwithstanding anything contained in the preceding sub-paragraph, a deduction based on the actual amount of the consideration given shall he allowed. This proviso shall not, how­ ever, apply where the person who acquired the property was a com­ pany in which the transferror was at or about the date of the transfer substantially interested as a share­ holder or was a company the share­ holding interests in which were at or about the date of the transfer in sub­ stantially the same hands as those of the company from which it was acquired;

(iv)  no deduction under this paragraph (1) shall be allowable in respect of any property where the amount already allowed for depreciation under this Act or the previous Act or any Act repealed by the previous Act equals the value on which depreciation is allowable under this paragraph.

(m) A proportionate part of—

(1) the amount paid by any taxpayer (being the lessee under a lease or the transferee or assignee of a lease) as a premium, fine, or foregift or con­ sideration in the nature of a premium, tine, or foregift for a lease or a renewal of a lease, or as an amount for the assignment or transfer of a lease of land, premises, or machinery used for the production of income, arrived at by distributing the amount so paid proportionately over

over the unexpired period of the lease at the date the amount was so paid;

(2) the amount paid for a right to remove standing timber from land (not in­ cluding an amount paid in connection with the purchase of a freehold or leasehold estate in land) which in the opinion of the Commissioner is the part of the amount paid for such right attributable to the timber removed and sold during the income year :

Provided that—

(i)  the taxpayer proves to the satisfaction of the Commissioner that he has paid such an amount;

(ii)  the deduction under sub-paragraph (1) of this paragraph shall not be made with respect to any lease from the Commonwealth or the State or any authority of the State, being a perpetual lease without re-valuation or a lease with a right of purchase ;

(iii)  where in the case of an assignment or transfer either before or after the commencement of this Act) of a lease, or of a right to remove standing timber from land, the amount received

has not been returned as income by

the assignor or transferror of the lease or right and the person who acquired the lease or right was a company7 in

which the assignor or transferror was at or about the date of the assignment or transfer substantially interested as a shareholder, or was a company the shareholding interests in which were at or about the date of such assign­ ment or transfer in substantially the same hands as those of the company

from

from which it was acquired, no deduction shall he allowed beyond the sum (if any) to which the assignor or transferror was entitled. I n any case to which this clause (iii) of this proviso is applied the assignor or transferor shall not be assessable under this Act in respect of the amount received on such assignment or transfer.

(n) A proportion of the sum necessary to recoup amounts expended under an agreement in writing, on improvements on land by a lessee who has no tenant rights in the improvements, arrived at by distributing the amount expended (not exceeding the sum agreed upon) proportionately over the unexpired period of the lease at the date the improvements were effected :

Provided that this paragraph shall not apply in any case where there is a lease of land (granted either before or after the commencement of this Act) to a company from any individual who at or about the date of such agreement directly or in­ directly controls or controlled the voting power of the company, or in any other case in which the Commissioner is of opinion that, in consequence of the terms and conditions of the lease or of any other circumstances the lessor was at or about

operations of the lessee. In any case to such date in substantial control of the

which this proviso is applied, the landlord shall not be assessable under paragraph (g) of section eleven.

(o) The expenditure actually incurred during the income year by any taxpayer carrying on mining operations (other than coal mining or quarrying) in the State for labour and materials employed in sinking shafts in a producing mine and in the course of extending the area of operations.

(P)

(p) The sum of one hundred pounds in respect of the annual allowance of members of the Legislative Assembly of New South Wales or of New South Wales' members of the Parliament of the Commonwealth,

(op) Gifts of ten shillings and upwards made out of the assessable income derived during the year in which the gifts are made to public charitable institutions in the State, to the Sydney University, or to colleges affiliated therewith, if the gifts are verified to the satisfaction of the Commissioner.

For the purpose of this subparagraph—

" Affiliated college " means a resi­ dential educational institution affiliated under a statutory pro­ vision with the Sydney Uni­ versity.

" Gif t" means a gift in the form of money or a gift in kind when the Commissioner is satisfied that the donor has used part of bis assessable income of the year for the acquisition of the gift.

"Public charitable institution " means

a public hospital, a public

benevolent institution, the

trustees of the Australian Museum, the trustees of the Public Library of New South Wales, the trustees of the National

Art Gallery, the National Library

referred toin the National Library Act, 1924, a public educational institution not carried on for the profit of individuals, an institution for the benefit of returned soldiers, and includes a public fund established and maintained for the purpose of providing money for such institu­ tions, or for the relief of persons in necessitous circumstances.

(r)

(r)

Such amount as the Commissioner considers just and reasonable (not exceeding fifty pounds for each child) as representing the cost to a taxpayer for food, quarters and other expenses in respect of children who are over the age of sixteen years and under twenty-one years of age at the beginning of the income year and who are wholly or partly employed by him in his business, and to whom no payments are made for wages.

(s)

Sums expended in boring, sinking wells or excavating tanks for water by a taxpayer carrying on a pastoral or agricultural business, if such operations are either unsuccessful or result in other than drink­ able water being obtained but not including the cost of plant or of material which may be used elsewhere.

(2) In the case of a resident person—

(a)	every premium or sum paid by the tax­ payer during the income year for the insurance of the taxpayer's own life or that of the wife, husband or children of the taxpayer or for a deferred annuity or other like provision for the husband, wife or children of such taxpayer, or in respect of any fidelity guarantee or bond which such taxpayer is required to provide for the exercise of his business :
Provided that in no case shall any beyond the sum of fifty pounds in the deduction be allowed under this paragraph

aggregate, or for any premium or sum paid in respect of any insurance, annuity, or other provision effected outside Australia.

(b) payments not exceeding one hundred pounds in the aggregate made for the personal benefit of the taxpayer or his wife or children during the income year by a taxpayer who is in receipt of salary, wages, allowances, stipends or annuity, or whose taxable income does not exceed

eight

eight hundred pounds, to superannuation, sustentation widows' or orphans' fund established in Australia, or any society duly registered under any Friendly

Societies Act of the Commonwealth	or
State;

(c) (i) the amount of fifty pounds in respect of each child who is wholly maintained by the taxpayer and who is under the age of sixteen years at the beginning of the income year.

Where the child is not wholly main­ tained by the taxpayer for the whole of the income year, or where the child is but partially maintained by the taxpayer either for the whole or part of the income year, or where the child so wholly or partially maintained attains the age of sixteen years during the income year, such proportionate part of fifty pounds as the Commis­ sioner shall decide as fair and ecjuitable in the circumstances;

(ii)  the amount of fifty pounds in respect of the wife of a taxpayer who is not separated from her husband either under an order of a court of competent jurisdiction or a separation agreement, or who, if so separated, is wholly main­

tained by him ;

(iii)  an amount not exceeding fifty pounds for sums actually expended towards the maintenance of dependants by an unmarried taxpayer. A depen­ dant means a relative of the taxpayer by blood, marriage or adoption. Any payments to the dependant which, in the opinion of the Commissioner, are for board and lodging of or other services to the taxpayer shall be ex­ cluded in calculating such expenditure:

Provided

Provided that a person -whose in­ come during the income year exceeds the sum of one hundred pounds, or in respect of whom a deduction is allowed to any taxpayer under subparagraphs (i) or (ii) of this paragraph shall not be deemed to be a dependant ;

(d)

such sum as is paid by the taxpayer to—

(i)	any legally qualified medical practi­ tioner, dentist, public or private hospi­ tal, nurse or chemist in respect of any illness of or operation upon the tax­ payer or the wife, husband or any of the children or dependants (as defined in paragraph (c) (iii)) of the taxpayer; and to
(ii)	any undertaker for funeral and burial or cremation expenses arising out of the death of the wife or husband of the taxpayer or of any of his children or dependants (as denned in pai*a- graph (c) (iii) ).

The deductions mentioned in subpara­ graphs (i) and (ii) of this paragraph are to be allowed only when the taxable income of the taxpayer does not exceed four hundred pounds, and in no case shall a deduction be allowed under sub­ paragraph (ii) exceeding the sum of

twenty pounds; and
(e)	expenses actually incurred by a taxpayer in educating his children under eighteen years of age (not exceeding lifty pounds for each child during the income year) if suitable educational facilities are not provided by the State within reasonable daily travelling distance of the place of residence of the taxpayer. This paragraph shall not apply where the taxable income exceeds eight hundred pounds.

(3)

(3) (a) In the case of a resident person (other than a company) the sum of two hundred and fifty pounds less the sum of one pound for every eight pounds by which the net in­ come exceeds two hundred and fifty pounds;

(b) In the case of a non-resident person (other than a company) the sum of fifty pounds less the sum of one pound for every eight pounds by which the net income exceeds fifty pounds.

2 0 . (1) The deductions in paragraph (q) of sub­ section one, and in subsection two and in subsection three of section nineteen shall be made in the first place from income derived from personal exertion.

(2) The other deductions provided in subsection one of section nineteen shall be made in the first place from income derived from personal exertion unless such loss, outgoing or expense was incurred in the production of income derived from property, in which case such deduction shall be made in the first place from income derived from property.

(3) When the provisions of section nine are resorted to, the deductions in paragraphs (p) and (q) of subsection one and in subsections two and three of section nineteen shall be made in the first place from income other than that derived from agricultural, dairying, or pastoral pursuits.

(4) If the income of the class from which the

deduction is in the first place to be made does not

be deducted from the other class or classes.	amount to the sum to be deducted, the difference shall
2 1 . A deduction shall not in any case be made in respect of any of the following matters :—

(a)	the cost incurred in the maintenance of the tax­ payer, his family or establishment, other than as specified in section nineteen of this Ac t ;
(b)	domestic or private expenses, other than as specified in subsection two of section nineteen ;
(c)	income carried to any reserve fund, or capita­ lized in any way;

(d)

(d)	money not wholly or exclusively laid out or expended for the production of the assessable income;
(e)	rent, or value of, or cost of repairs to any premises or part of premises not usually occupied for the purpose of producing assess­ able income;
(f)	any bad debts, except as provided for in para­ graph (k) of subsection one of section nineteen of this Ac t ;
(g)	any loss not connected with or arising out of the production of assessable income, except as specified in sections twelve and twenty-two;
(h)	investment, expenditure, loss or withdrawal of capital; money used or intended to be used as capital; capital used in the improvement of premises occupied for the purpose of any business, or used in the production of income; interest which might have been made on such capital or money if laid out at interest—except as specifically allowed by subsection one of section nineteen;

(i)  interest, except as provided in paragraph (a) of subsection one of section nineteen of this A c t ;

(j)	any wastage or depreciation of any lease or in respect of any loss occasioned by the expiration of any lease, except as provided in paragraph (m) of subsection one of section nineteen of
this Ac t ;
(k)	any payment of income tax or of any other
rates or taxes not allowed as a deduction by paragraph (b) of subsection one of section

nineteen.

(1) any expenses which have been incurred in deriving income which is exempt from income tax ;

(m) any sum as a bonus or fee, salary, commission or allowance paid or credited to a director of a company or to a member of the family of a director of a company in excess of what the Commissioner considers a reasonable

amount,

amount ; but such excess shall be treated as dividends from a company in the hands of the recipients. This paragraph shall apply only to companies to which section thirty-one may be applied;

(n)	head office expenses of a company beyond an amount which bears the same proportion to the total head office expenses as the revenue derived by the company in the State bears to the total revenue or beyond such an amount in excess thereof as may be fixed by the Commissioner;
(o)	any sum paid by a taxpayer to a relative by blood, marriage, or adoption, in excess of the amount which the Commissioner is satisfied has been paid bona fide in the course of business and for services rendered ;
(p)	any sum paid or payable by a company to any member or shareholder in excess of the amount which the Commissioner is satisfied has been paid bona tide in the course of business or for services rendered. This paragraph shall apply only to companies to which section thirty-one may be applied;
(q)	any loss or expense which is recoverable under any contract of insurance or indemnity.

2 2 . (1) Where a taxpayer makes a loss in any income year in carrying on a business or businesses either alone or as a partner with other persons, the proceeds of which, if any, would be assessable income,

able income derived by him in that year from other	he shall be entitled to deduct the loss from any assess­
sources:
Provided that the loss shall be deducted in the first place from the income returnable under paragraph (b) of section eleven, if any, but if that income does not amount to the loss to be deducted, the difference shall be deducted from his income from personal exertion, if any, in the same year, and if this income does not amount to such difference, the balance shall be deducted from his other income from property, if any, in the same year :

Provided

Provided, further, that if the loss results from the carrying on of any agricultural, dairying or pastoral pursuit as defined in section nine, it shall be deducted in the first place from any other income from any such pursuit during that year, and if this income does not amount to such loss, the balance shall be deducted from the income from other sources in the order set out in the first proviso to this subsection.

(2) If the taxpayer did not derive any assessable income from other sources in that year or if the loss exceeds the net assessable income derived by him from other sources, the loss or the excess of the loss over such net assessable income, as the case may be, shall be carried forward into his subsequent yearly returns, but not exceeding two years subsequent to the year in which the loss occurs. In this subsection " net assessable income" means net income as defined in section four of this Act, but not including any deduction allowable under this section.

(3) The loss or the excess of the loss which is carried forward under the provisions of subsection two hereof shall be deducted from the assessable income of the year or years into which it is carried forward in the order provided in the provisos to subsection one

hereof.

(4) Where any taxpayer who is entitled to a deduction under subsection two hereof is a taxpayer to whom section nine of this Act applies, then the amount, of the loss carried forward under subsection two hereof shall not be taken into account under paragraph (d) of

of allowable deductions for the year in which the loss	subsection one of section nine in ascertaining the excess	was incurred.
(5) Nothing in this section shall apply with respect to any loss incurred by a taxpayer prior to the first income year to which this Act applies.
2 3 . In the case of any company (other than a co-operative society) which entirely or mainly either purchases from or sells to its own members or share­ holders, or of a mutual building, investment or

insurance

insurance company (other than a co-operative society or a life assurance company), the following provisions shall apply :—

(1) The assessable income of any such company shall include—

(a)	all sums received from members in payment of interest or premiums of insurance or for commodities supplied or for animals or land sold to them or received in respect of commodities, animals or land sold by the company whether on its own account or on account of its members; and
(b)	contributions levied on its suppliers based on the quantity or value of commodities, animals or land supplied, which in the opinion of the Commissioner are in effect a reduction in the amounts paid to suppliers for commodities, animals or land so supplied:

Provided that when any such contribu­ tions so levied are included in the income of such company, they shall not be included in the assessable income of the suppliers.

(2) In arriving at the taxable income of any such company, there shall be deducted, in addition to any other deductions allowed by this Act, the amount distributed, within nine months after the close of the income year, among its

ance by members or shareholders or on sales	members or shareholders, based on purchases or payments of interest or premiums of insur­
by members or shareholders to the company :
Provided that where any such company makes sales to persons other than members or shareholders, only so much of the amount distributed as bears to the total amount distributed the same proportion as the amount of the sales to the shareholders or members bears to the total amount of the sales by the company, shall be allowed as a deduction.

(3)

(3) No deduction shall in any case be allowed in respect of the amount distributed among the members or shareholders as interest in respect of, or as dividends on, shares.

(4) The taxable income of a co-operative society shall he assessed subject to section sixty-three of the Co-operation Acts, 1923-1928, or any amendment thereof or any enactment sub­ stituted therefor.

2 4 . (1) When a foreign company or non-resident person carries passengers, live-stock, mails, or goods shipped in the State, either as owner or charterer of any vessel, such company or person shall by itself or himself or by the master or its or his agent in the State, within the prescribed time or when the Commissioner may require, make a return of the full amount payable to it or to him, whether such amount is payable in the State or beyond the State, in respect of the carriage of such passengers, live-stock, mails or goods.

. Such company, person or master or other agent shall be assessed thereon in respect of income directly or indirectly derived from a source within the State, and the taxable income shall, if such taxable income cannot, in the opinion of the Commissioner, be otherwise satisfac­ torily determined, be assessed at an amount equal to live pounds for every one hundred pounds so payable as aforesaid.

(2) Where no return is made under this section by such person or company, or by the master or other such agent, the Commissioner may determine the amount payable to such person or company in respect of the carriage of passengers, live-stock, mails and goods, and

may assess the tax payable on five pounds per centum	of that amount, and the master shall be assessed thereon
and shall be liable to pay the tax assessed.
(3) Where a return is made as required by this section, and an assessment in respect of that return is made on the master or other agent, and the tax is not paid as required by or under this Act, the master shall be liable to pay the tax so assessed.
(4) Wherever an assessment is made upon the master or wherever the master becomes otherwise liable to pay the tax assessed, the Commissioner shall give notice

(2)

(2) If the Commissioner considers that the circumstances of any case warrant action being taken to recover the penalty provided by the last preceding section, or by the next succeeding section, such, action, may be taken by the Commissioner, and in that case the additional tax payable under this section shall not be charged.

69.      Any person who, with intention to defraud, in

any return understates the amount of any income, shall be guilty of an offence, and shall be liable to a penalty of not less than fifty pounds nor more than five hundred pounds, and in addition an amount equal to treble the amount of income tax which would have been avoided if the income stated in the return had been accepted as the correct income.

70.      Any person who, by any wilful act, default or

neglect, or by any fraud, art or contrivance whatever, avoids or attempts to avoid assessment or taxation, shall be guilty of an offence and shall be liable to a penalty of not less than fifty pounds nor more than five hundred pounds, and in addition treble the amount of tax, pay­ ment whereof he has avoided or attempted to avoid.

71. A prosecution in respect of an offence against either of the two last preceding sections may be com­ menced at any time within six years after the commission of the offence.

7 2 . Payment of penalties under this Act shall not relieve any person from liability to assessment and pay­ ment of any tax for which he would otherwise be liable. 7 3 . Any person who obstructs or hinders any officer or person acting in the discharge of his duty under this	Act or the regulations in force thereunder, shall be	guilty of an offence, and shall be liable to a penalty of
not less than one pound nor more than fifty pounds.
7 4 . Any person guilty of a breach of this Act for which no penalty is otherwise provided, shall be liable to a penalty not exceeding fifty pounds.
7 5 . Any penalty imposed by this Act or by regula­ tions in force thereunder may be recovered in a summary manner before two or more justices, or a stipendiary or police magistrate.

76. In any action against an officer or person for anything done in pursuance of this Act, or in the execution of the powers conferred thereby, or by the regulations, the defendant in such action may plead the general issue, and give the special matter in evidence at the trial.

77.      I n any prosecution under this Act an officer or

any person employed in the administration of this Act shall not be compelled to disclose the fact that he received any information, or the nature thereof, or the name of the person who gave such information, and an officer or any other such person appearing as a witness shall not be compelled to produce any reports made or received by him confidentially in his official capacity, or containing confidential information.

PART VIII .

MISCELLANEOUS.

78. Every company which derives income shall at all times be represented by a person residing in the State duly appointed by the company or by its duly authorised agent or attorney, and with respect to every such company and person the following provisions shall apply :—

(a)	such person shall be called the public officer
appointed, be appointed within three months of the company, and shall, if not already

after this section comes into force or after the

company commences to derive income ;

(b) the company shall keep the office of public officer constantly filled and no appointment of a public officer shall be deemed to be duly made until after notice thereof in writing, specifying the name of the officer and the address for service in the State, has been given to the Commissioner;

(c)

(c)	if the company fails or neglects duly to appoint a public officer when and as often as such appointment becomes necessary, it shall be guilty of an offence and shall be liable to a penalty of fifty pounds for every day during which the failure or neglect continues;
(d)	service of any document at the address for service or on the public officer of a company shall be sufficient service upon the company for all the purposes of this Act or the regula- tions in force thereunder, and if at any time there is no public officer then service upon any person acting or appearing to act in the business of the company shall be sufficient ;
(e)	without prejudice to the liability of the com- pany, the public officer shall be liable for the doing of all such things as are required to be done by or on behalf of the company under this Act or the regulations in force thereunder, and in case of default in doing any of such things, shall be liable for all penalties imposed for any breach of the provisions of this Act or such regulations, and the company, as well as such public officer, shall also be liable for such penalties;
(f)	everything done by the public officer which he is required to do in his representative capacity shall be deemed to have been done by the company. The absence or non-appointment of a public officer shall not excuse the com­ pany from the necessity of complying with
any of the provisions of this Act or the regu­ lations, or from the penalties of the section or

regulation on the failure to comply there­ with, but the company shall be liable to the provisions of this Act as if there were no requirement to appoint a public officer:

Provided that every public officer of a company holding that office at the date of passing of this Act for any of the purposes of and duly appointed under the previous Act shall, until such appointment is terminated,

be

be the public officer of that company for all the purposes of this Act, and this Act shall apply to that company and that public officer accordingly.

7 9 . With respect to every agent, and with respect

also to every trustee, the following provisions shall apply
unless otherwise provided in this Act :—

(1) He shall be answerable as taxpayer for the doing of all such things as are required to be done by virtue of this Act in respect of the income derived b y him in his representative capacity or derived b y the principal by virtue

of his agency and the payment of income tax

thereon.

(2) He shall in respect of such income make the returns and be assessed thereon, but in his representative capacity only, and. each return

and assessment shall , except as otherwise

provided b y this Act be separate and distinct

from any other.

(C) If he is a personal representative of a deceased person, the returns shall be the same as far as practicable as the deceased person, if living, would have been liable to make.

(4) Nothing herein contained shall exempt or discharge any principal or beneficiary from liability to make returns, and pay income tax upon the whole of his taxable income.

8 0 . With respect to every person who has the receipt, control, or disposal of money belonging to a non-resident person who derives income from a source in the State, or who is a shareholder, stock-holder, debenture holder, or depositor in a company deriving income from a source in the State, the following provisions shall, subject to this Act, apply :—

(a)	he shall, when required by the Commissioner, pay the income tax due and payable by the person on whose behalf be has the control, receipt or disposal of money ;
(b)	where he pays income fax in accordance with the preceding paragraph be is hereby autho­ rized to recover the amount so paid, from the person on whose behalf he paid it or to deduct it from any money in his hands belonging to
that person; (c)

(c)	he is hereby authorised and required to retain from time to time out of any money which comes to him on behalf of the non-resident person so much as is sufficient to pay the income tax which is or will become due by that person;
(d)	he is hereby made personally liable for the income tax payable by him on behalf of the non-resident person if, after the Commissioner has required him to pay the tax, he disposes of or parts with any fund or money then in his possession or which afterwards comes to him from or out of which the income tax could legally be paid, but he shall not be otherwise personally liable for the tax :
Provided that the Commissioner may upon application permit disposal of such fund or money or part thereof as he considers necessary ;
(e)	he is hereby indemnified for all payments

which he makes in pursuance of this Act or by

requirements of the Commissioner. x

8 1 . Where any income of any person outside the State is paid into the account of that person with a banker in the State, the banker shall be deemed to be the person's agent in respect of the money so paid so long as he is indebted in respect thereof, and shall be subject to the provisions and entitled to the benefits relating to agents contained in this Act.

8 2 .     (1) A covenant or a stipulation in a mortgage of

land which has or purports to have the purpose or effect of imposing on the mortgagor the obligation of paying to or on behalf of or for the benefit of the mortgagee income

tax on the interest to be paid under the mortgage—
(a)	if the mortgage was entered into on or before the date of the commencement of this Act— shall not be valid to impose on the mortgagor the obligation of paying income tax to any greater amount than the amount (if any) which would have been payable by the mortgagor if his taxable income consisted solely of a sum equivalent to the amount of interest to be paid under the mortgage without taking into account any income tax payable on that
interest ; and (b)

(b) if the mortgage was entered into after that date—shall be absolutely void.

(2) A mortgage of land which contains a covenant to pay a certain rate of interest but provides that the mortgagee may accept a sum calculated to cover the interest chargeable at a lower rate together with an amount representing the income tax payable thereon shall be deemed to contain a covenant or stipu­ lation imposing on the mortgagor the obligation of paying income tax within the preceding subsection, and shall as regards such covenant or stipulation to pay income tax be subject to such preceding subsection.

8 3 . Every contract, agreement or arrangement made or entered into, in writing or verbally, whether before or after the commencement of this Act, shall, so far as it has or purports to have the purpose or effect of in any way, directly or indirectly—

(a) altering the incidence of any income t a x ; or (b) relieving any person from liability to pay any

income tax or make any re turn; or

(c) defeating, evading, or avoiding any duty or
liability imposed on any person by this Act; or

(d) preventing the operation of this Act in any

respect,

be absolutely void, but without prejudice to its validity

in any other respect or for any other purpose.

8 4 . Where under any contract, agreement or

arrangement made or entered into, in writing or verbally, either before or after the commencement of this Act, a person assigns, conveys, transfers or disposes of an income-producing asset on terms and conditions

veyance, transfer or disposal of the asset by periodical which include the payment for the assignment, con-	payments which, in the opinion of the Commissioner,
are really in the nature of income of the person assign- ing, conveying, transferring or disposing of the asset, that person shall be assessed to pay income tax upon those periodical payments.
8 5 . The Commissioner, or any officer authorised by him in that behalf, shall at all times have full and free access to all buildings, places, books, documents and other papers for any of the purposes of this Act, and for such purposes may make extracts from or copies of any
such books, documents and papers. 8 6 .

8 6 . Wherever the Commissioner has reason to believe that any person establishing or carrying on business in the State intends to carry on that business for a short time only, or intends to leave the State, or where the Commissioner for any other reason thinks it proper so to do, he may at any time, and from time to time, require the taxpayer to give security by way of bond or deposit or otherwise to the satisfaction of the Commissioner for the due return of, and payment of income tax on the income of such taxpayer.

8 7 .      (1) The Commissioner may by notice in writing

require any person, whether a taxpayer or not—

(a)

to furnish him with such information as he may require; and

(b)

to attend and give evidence before him or be- fore any officer authorised by him in that behalf concerning his or any other person's income or assessment, or concerning any matter or tiling in relation to which the Commissioner considers or suspects such person may be cap­ able of giving information which may assist in the carrying out of this or the previous Act, and may require him to produce all books, documents, and other papers whatever in his custody or under la is control relating thereto.

(2) The Commissioner may require the infor­ mation or evidence to be given on oath, and either verbally or in writing, and for that purpose he or the officer so authorised by him may administer an oath.

(3) The regulations may prescribe scales of

expenses to be allowed to persons required under this

section to attend.

8 8 .      (1) In any case where it is shown to the satis­

faction of a board consisting of the Commissioner, the Auditor-General or his deputy, and a person appointed by the Governor.

(a)	that a taxpayer liable to pay income tax has become bankrupt ; or
(b)	that a taxpayer has suffered such a loss or is in such circumstances, or, owing to the death of a person who, if he had lived, would have

paid

paid tax, the dependants of that person are in such circumstances that the exaction of the full amount of the tax will entail serious hardship,

the hoard may release the taxpayer or the executor or administrator of the deceased person (as the case may he) wholly or in part from his liability, and the Commissioner may make such entries and alterations in the assess- ments as are necessary for that purpose.

(2) The Commissioner shall he chairman of the

hoard, and the decision of the majority shall prevail.

8 9 .      (1) In any case in which the board referred to

in the last preceding section is satisfied that every reasonable effort has been made to recover income tax, or that it is impracticable without undue expense to recover such tax, it may direct the amount thereof to he written off.

(2) The taxpayer shall not be released from his liability in consequence of any action taken by the board under subsection one hereof, and the Commissioner may at any future time take such action to recover any such income tax as he considers the circumstances warrant.

(3) For the purposes of this section income tax includes any additional income tax, or any costs incurred in attempting to recover such tax.

(4) The provisions of this and the preceding

section shall apply to any tax assessed under the

previous Act which has not been paid at the date of the	commencement of this Act or which may after such date
be assessed under the provisions of the previous Act.
90 . (1) The Governor may make regulations, not inconsistent with this Act, prescribing all matters which by this Act are required, or permitted to be prescribed, or which are necessary or convenient to be prescribed for giving effect to this Act, including (but without limiting the foregoing power) the means of determining in all or any particular class of case, the amount of any assessable or taxable income in so far as the method of ascertainment is not herein already provided for.

(2)

(2) The regulations may impose a penalty not exceeding twenty pounds for any breach thereof, and may prescribe maximum and minimum penalties in case of any breach thereof.

(3) The regulations shall—

(a) be published in the Gazette;

(b)	take effect from the date of publication or from a later date to be specified in the regulations ; and
(c)	be laid before both Houses of Parliament within fourteen sitting days after publication if Parliament is in session, and if not, then within fourteen sitting days after the com- mencement of the next session.

If either House of Parliament passes a resolution of which notice has been given at any time within fifteen sitting days after such regulations have been laid before such House disallowing any regulation or part thereof, such regulation or part shall thereupon cease to have effect.

9 1 . (1) The Commissioner shall furnish to the Colonial Treasurer annually for presentation to Parlia­ ment a report on the working of the Act.

(2) In the report the Commissioner shall draw attention to any breaches or evasions of this Act which have come under his notice.

9 2 .      This Act shall be read and construed so as not

to exceed the legislative power of the State to the intent
that where any enactment thereof would, but for this

power, it shall nevertheless be a valid enactment to the	section, have been construed as being in excess of that
extent to which it is not in excess of that power.

THE

T H E S C H E D U L E .

Application of Section Thirty-one in respect of Undistributed Income

oj a Company,

1. Section 31 shall apply to any company which is under the control

of not more than seven persons, and which is not a subsidiary company

or a company in which the public are substantially interested. For the purposes of this paragraph—

(i)   A company shall be deemed to be a subsidiary company if, by reason of the beneficial ownership of shares therein, the control of the company is in the hands of a company not being a company to which the provisions of section 31 apply, or of two or more companies none of which is a company to which those provisions apply.

(ii)  A company shall be deemed to be a company in which the public are substantially interested if shares of the company (not being shares entitled to a fixed rate of dividend, whether with or without a further right to participate in profits) carrying not less than twenty-five per centum of the voting power have been allotted unconditionally to or acquired unconditionally by and are at the end of the income year beneficially held by, the public (not including a company to which the provisions of this section apply) and any such shares have in the course of such income year been quoted

on the official list of a stock exchange.

(iii)  A company shall be deemed to be under the control of any persons where the majority of the voting power or shares is in the hands of those persons or relatives or nominees of those persons, or where the control is by any other means whatever in the hands of those persons.

The expression " re la t ive" means a husband or wife, ancestor, or lineal descendant, brother or sister.

The expression "nominee" means a person who may be required to exercise his voting power o n the directions of, or holds shares directly or indirectly on behalf of, another person.

Persons in partnership and persons interested in the estate of a deceased person or in property held on a trust shall,

respectively, be deemed to be a single person.

2. For the purposes of section 31 , dividends credited, paid or distributed to a company which is a member or shareholder in any other company shall (to the extent to which such dividends would be taxable income if paragraph (b) of section 11 applied to a company) be deemed to be part of the first mentioned company's taxable income.

3. In addition to any other facts which the Commissioner may consider in exercising the powers conferred upon him by paragraph (a) of section 31 the Commissioner shall take into consideration the relation between the distributable income of the company and its taxable income, and the fact of the retention by the company of taxable income for the following purposes : —

(a) To restore unrecouped losses of paid-up capital or of accumu­ lated trading profits which had been invested in the business ; and

(b)

(b) To meet losses which the directors consider were certain to arise during subsequent income years:

Provided that it a company carrying on an agricultural or pastoral pursuit so elects within the prescribed time and in the prescribed manner that paragraph (b) of this clause shall not apply in respect of the income from such pursuit that paragraph shall not apply accordingly but the amount which would otherwise be determined as the distributable income shall be reduced by an amount equal to fifteen per centum of the taxable income derived by the company from the carrying on of the agricultural or pastoral pursuit.

The Commissioner may have due regard to the develop- ment of businesses and industries.

4. Any sum such as is hereafter described shall, for the purposes of paragraph (a) of section 31, be regarded as income which could reasonably have been distributed by a company among its members or shareholder —

(a) any sum expended or applied, or intended to be expended or applied, out of the income of a company—

(i)   in or towards payment for the business, undertaking or property which the company was formed to acquire or which was the first business, undertaking, or property of a substantial character in fact acquired by the company ; or

(ii)   in redemption or repayment of any share or loan, capital or debt (including any premium on such share or loan capital or debt) issued or incurred in or towards payment for any such business, undertaking or property, or issued or incurred for the purpose of raising money applied or to be applied in or towards payment there or ; or

(iii)  in meeting any obligations of the company in respect of the acquisition of any such business, undertaking or property ;

(b)	any part of the taxable income of the company expended or applied or retained for the purpose of being expended or	applied in pursuance or in consequence of an arrangement	which, in the opinion of the Commissioner, was made for the
purpose of avoidance or reduction of any liability to income tax.

5. A determination under section 31 shall be made by the Commissioner not later than nine months after the date on which the tax assessed against the company under its ordinary assessment is due and payable.

6. Where the Commissioner has made a determination under

section 31, and—

(a) the company satisfies the Commissioner that the sum or further sum which could reasonably have been distributed by the company among the members or shareholders is an amount which is less than the sum or further sum determined by the Commissioner under such section ; or

(b)

(b) where the Commissioner is satisfied that the company has withheld information or has furnished incorrect or misleading information for the purpose of avoiding tax in an ordinary assessment or under such section,

the Commissioner may, either before or after the time limited for making his determination, make a determination or further determina­ tion, and thereupon the provisions of section 31 (b) shall apply to the sum or further sum specified in that determination as if it were the sum or further sum mentioned in section 31 (b).

7. The following provisions shall apply for the purpose of calculating the tax or additional tax which would have been payable by the shareholders : —

(i)  The income apportioned to a member or shareholder shall be deemed to have been received by him on such date as the Commissioner determines to be just, having regard to the dates on which distributions of income, if any, have ordinarily been made by the company.

(ii)  Where a person is a member or shareholder in more than one company to which section 31 has been applied in respect of income of the same year ended on the 30th day of June or of such other period accepted by the Commissioner in lieu of such year ended on the 30th day of June, the tax or additional tax which would have been payable by that member or share- bolder shall be calculated as if all such sums had actually been distributed during such income year, and the total amount of tax or additional tax so ascertained shall be divided between the companies in such proportions as are prescribed by regulations, or if there are no regulations as the Commissioner considers just having regard to the amount which such member or shareholder is deemed to have received from each company, and to the rate of tax applicable to the income of each company.

8. Where any person (other than a company, trustee or partnership) otherwise than as a member or shareholder of the company would (if there had been successive distributions of the relevant parts of the sum or further sum determined by the Commissioner to and by each company, trustee, and partnership interposed between that person and the company in respect of which the determination is made) have	received a part of that sum or further sum determined by the
Commissioner under paragraph (a) of section 31, the Commissioner
may, if he thinks fit, also assess the tax and the additional tax, if any, which would have been payable by that person if those distributions had been made, and such tax and additional tax shall be deemed to be tax and additional tax assessable under paragraph (b) of section 31.
9. Any undistributed income which has been assessed and charged to income tax under section 31 shall, when subsequently distributed, bo deemed not to form part of the assessable income of the member or shareholder entitled thereto.

S W I N E