APPEAL COURT.

Taranaki Daily News, Volume LIV, Issue 14, 11 July 1911, Page 5

APPEAL COURT.

AN INCOME TAX CASE. INTERPRETATION OF A SECTION,. By Telegraph—Press Association. Wellington, Last NigKt. The Court of Appeal {Sir lOTert Stout, Sir Joshua Williams, and Justices Dennisfon, Edwards, and Sim) aat tfnia morning to hear an originating summons moved into the Court of Appeal for argument between G. P. Donnelly, ■of Hawke's Bay, and the Commissioner of Taxes.

The question for the courts consideration arise in connection with the inter-i pretation of section 56 of the Land and Income Tax Assessment Act, 1008, nnd are: (1) Whether the right of occupa- ' tion given by the will of his wife to plaintiff is leasehold estate in the land within the meaning of the said section; (2) whether the right of occupation given him by agreement with the trustees of the will is leasehold estate; (3) whether, when the land is owned common by Europeans and Maoris, a leasehold estate granted .by such European to a European in respect ot an undivided interest of the lessor ia exempted from taxation under the said section a* being leasehold estate in Maori land within the meaning of subsection 3 of the said 1 nctfon. By her will, the testatrix devised to her husband (plaintiff) all her interest' in the Waimarania blocks, subject to certain conditions. These-, condition* were not fulfilled".' and plaintiff's present occupation is by agreement with i&* trustees until they' should require possession thereof for the purposes of sale, subject to the payment of interest on certain mortgage moneys secured on the properties. Plaintiff was also entitled under the will to the use and occupation, rent free, of all the lands of the testatrix not leased to others. These are the lands referred to in question one, and the Waimamarame, blocks are lands referred to in question two: Mr. H. Dillon "Bell, K.C., with him Mr. Lewis appeared for plaintiff, and the Solicitor-General for the Commissioner of Taxes.

Mr. Bell, in opening the argument, stated that the importance of the case to plaintiff lay in the fact that if the court held that plaintiff's right to the use and occupation of the lands was leasehold within the meaning of section 50 of the Land and Income Tax Assessment Act, 1908, the .value of the leasehold estate would be added to the value of the other properties held by the plaintiff, when assessing the graduated land tax. He contended that only rad leasehold was contemplated by the Legislature under this section and not mere occupation for an indefinite term, and proceeded to cite authorities in sup. port of this proposition. The Solicitor-General said the purpose of gxadpated land tax was to impose heavier taxation upon the holders of large estates. That Act was intended to tax persons in possession of land under any title whatever, and included lands held under the right of occupation. . «~

At the <*<mcrusiott of the SolicitorGeneral's argument, Mr. Sell briefly replied. ■'•. ■; >-_ 4 Tlie court reserved its decision.