Craig,
K.C.,
for
appellant.
C.
Killam,
for
respondent.
MAcDONALD,
C.J.A.—Two
questions
are
involved
in
this
appeal.
Appellants
contend
that
what
is
sought
to
be
assessed
as
income
is
in
reality
capital.
They
also
contend
that
if
it
is
income,
it
was
not
assessable
in
the
year
1922,
the
year
of
assessment.
The
statute
under
which
the
assessment
was
made
is
the
Income
and
Personal-Property
Taxation
Act,
ch.
48
of
the
provincial
statutes
of
1921
(2nd
sess.),
sec.
36.
Under
this
statute
income
of
1921
is
assessable
and
payable
in
1922.
If,
therefore,
the
income
in
question
was
income
of
1921,
it
was
rightly
assessed
in
1922.
The
appellants
were
incorporated,
inter
alia,
with
powers
to
buy
and
sell
timber.
They
bought
the
tract
of
timber
in
question
and
resold
it
at
a
profit,
and
it
is
that
profit
which
is
assessed
as
income.
It
is,
I
think,
clear
that
a
company
whose
business
it
is
to
buy
timber
for
resale,
cannot
escape
taxation
by
treating
each
purchase
as
capital
and
the
increased
selling
price
as
an
accretion
to
capital.
Such
a
ruling
would
reduce
the
income
tax
law
to
a
farce.
Now,
whether
the
business
of
the
appellants
is
that
of
speculating
in
timber
lands
or
not,
is
a
question
of
fact.
They
took
power
to
do
it
and
they
have,
as
‘the
Court
below
has
pointed
out,
treated
the
profits
on
the
sale
of
the
timber
in
question
as
profits
and
available
for
dividends.
They
themselves
have
designated
the
character
of
the
accretion
to
their
wealth
by
declaring
it
available
for
dividends.
That
this
profit
was
income
of
1921,
the
appellants
themselves
have
by
their
books
and
proceedings
declared.
It
was
therefore
properly
assessed
and
made
payable
in
1922.
The
appeal
should
be
dismissed.
Martin,
J.A.
would
dismiss
the
appeal.
MCPHILLIPS,
J.A.—I
am
in
agreement
with
the
reasons
for
judgment
of
my
brother,
the
Chief
Justice,
and
agree
with
the
proposed
disposition
of
the
appeal.
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