Racing Club Loses Income Tax Appeal

Chronicle (Levin), 4 May 1949, Page 5

Racing Club Loses Income Tax Appeal

DUNEDIN, May 3. In a reserved judgement, Mr Justi-ce lay has found in favour of the Comlissioner of Taxes who was respondent n a case fieard reeently in the 8upreinFourt at Dunedin, in which the Crom vell Joclcey Club objected to being assessed for income tax on £395 2s 8d, thc club 's income for the year ended Marcu 31, 1947. His Honor said that appeilant's income was eorreetly assesse-1 and allowed costs (£15 15s) and disbursements in favour of respondent. The Judge said he was in agreement with the case decided by Mr JusticiChapman is 1920, a decision that wa? the main subinission by the Tax Department in the Cromwell Club case. Appellant had contended that as the Land and Income Tax Act was a commercial statute, a club like the Crom well Jockey Club could not be deemed to be carrying on business. He had come to the conclusion that the law on the subject was governed by a decisiou of the Court of Appeal in England in which it was held that ordinary menv bers of a goif club which, by the ternih of its lease, was required to allow visitors to play on the payment of green fees, was carrying on an enterprise be yond tlie ordinary functions of the club and that any proiits derived from the visitors 's green fees were taxable under legislation. Appellant was chargeable .vitli income tax unless it coulu estatlish that its revenue was not income for die purpose of the Act. His Honor said it was not without signiiicance wheu> cousidering the intenti-on of tlie legisla tion, that there now appeared an exemption in favour of bodies for promoting any game or sport (other than horse racing or trottuig; if such ganieb 1 1; sport were conducted for the recreation or entertainment of public and if no part of the income was used for private pecuniary profit of any individual or it making any payment to persons participating in the game or sport.