Lord Dunedin :—

The Commissioner of Taxes for the State of Victoria assessed the respondent company for income tax in respect of the year 1910 upon the sum of £113,998, being the sum which in his judgment upon the figures appearing in the balance-sheet and report of directors of the said company, dated 9th April, 1910, fell to be assessed under the Income Tax Acts. The respondent company objected to the assessment in so far as it was levied upon the sums of £104,782-1s. 4d. and £509-1s., which sums were admittedly included in the above-mentioned sum of £ 113,998. What these sums were in respect of which objection was taken will be presently explained. The Commissioner of Taxes, at the request of the respondent company, stated a special case for the opinion of the Supreme Court of Victoria.

The questions for the opinion of the Supreme Court as put were :-

"(1) Whether the surplus of £ 104,782-1s. 4d. mentioned in paragraphs 19 and 22 of this case is profits earned in or derived in or from Victoria by the new company, the respondents during the year 1909 or previous years within the meaning of Section 9 of Act No. 1819 so as to subject the new i.e., the respondent company to income tax