Tilley v. Federal Commissioner of Taxation.

Judges:
Zelling J

Court:
Supreme Court of South Australia

Judgment date: Judgment handed down 11 January 1977.

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Zelling J.: This is an appeal from a decision of Taxation Board of Review No. 2 dated 30th September, 1975.

The taxpayer Helen Tilley had appealed to the Board of Review against an adjustment made to her taxable income by the respondent

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ATC 4028

Commissioner in relation to the year of income ended 30th June, 1970, by adding in the profits obtained on two sales of shares in Poseidon Limited which in the Commissioner's opinion produced assessable income in the sum of $37,097. As this was one of a number of transactions in that year, some of which produced gains and some of which produced losses, the actual amount added to the taxpayer's assessable income was $36,469.

The Commissioner contended that the proceeds of the sale of these shares were assessable either as income within its ordinary concept under sec. 25, or as being a profit arising from the sale by the taxpayer of property acquired by her for the purpose of profit-making by sale within the first limb of sec. 26(a). The question of whether or not the income fell within sec 25 was not argued either before the Board or before me. The Commissioner did not abandon his contention but no argument was put to me in support of it. I cannot see how the amount in dispute can possibly be income within the ordinary concept of income and I think, as did Counsel, that the real contest is whether or not the amount is brought to tax by the first limb of sec. 26(a).

The taxpayer is a married woman and the wife of the late Cecil Peter Tilley, a leading chartered accountant in the city of Adelaide. It is common ground that Mrs. Tilley knows very little about shares. She left all such matters to her husband and both before the Board and before me it was agreed that the husband's intention is to be taken as the intention of the taxpayer. He was her agent. He dealt with the property as though it was his own and without reference to her except where reference was required to sign necessary documents. All decisions were made by him and she was quite prepared to adopt them, whatever they were, and there is no doubt that she did so in the instant case. Accordingly it is his intention which has to be first ascertained and then imputed to her as the principal as being her intention.

I would not like to think because of the concession made in this case that it is to be taken as of course that such an intention must always be imputed to a principal. Questions may well arise in other cases as to the nature of the intention required by the section of the Act in issue and as to the relationship between principal and agent and the nature and scope of the agency. However for the disposal of this case it is sufficient to say that the matter has been argued throughout as falling for decision on the basis that whatever was the husband's intention at the relevant time is to be treated as the intention of the appellant.

She objected to the Commissioner's amendment of her assessable income. The assessable income was varied in two other ways in her favour and those variations are immaterial for the purpose of this appeal. However the Commissioner throughout maintained his view that the net amount arising from the sales of the Poseidon shares was assessable income. When her objection on this score was disallowed, she appealed to Taxation Board of Review No. 2. Her appeal to the Board was disallowed, and the Commissioner's assessment was confirmed, and from that decision she appeals to this Court.

The facts shortly are that during the tax year in question the taxpayer's husband on her behalf bought and sold shares in twelve different companies. In a reply filed by Peter Tilley & Co., acting as accountants on behalf of the appellant, on 15th March, 1972, the taxpayer admitted that the dealings in shares in eight of the twelve companies, which were mainly if not totally mining shares, were purchased for resale at a profit. When Mr. Tilley was giving evidence, he admitted that two which were set down as ``investment'' shares in the reply of March, 1972, namely those in P.G.H. Industries and in McEwans Limited although set down in the reply as being purchased for investment purposes were in truth purchased for resale at a profit. He did however maintain that the purchases of shares in two companies: Mary Kathleen Uranium and Poseidon were for investment and not for resale at a profit. The taxpayer's late husband was a director of Mary Kathleen Uranium and had very considerable experience in relation to uranium mining. However as he said in evidence he had no experience in nickel mining and the purchase of these shares was on the advice of a Mr. Shierlaw. He said that when he rang Shierlaw to buy other shares for him, that Shierlaw said in reply:

``I think if I were you, seeing you have got some, I would advise you to buy some Poseidon shares. Don't if you don't want

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to, but I think they could be good for a long term investment. I would buy them and put them in the drawer. Just buy a few.''

The late Mr. Tilley then gave Shierlaw an order to purchase three thousand shares in Poseidon Limited for $3,380. He says that he knew nothing about the company and did not even know what mineral Poseidon Limited was looking for at the time when he purchased the shares.

The three thousand shares were sold as to one thousand on September 30 and the balance of two thousand on 2nd October, 1969. Tilley gave an explanation as to the sales on those two dates which is manifestly incorrect and to which I shall return later. The fact is that the shares sold on September 30 were sold at about $5.60 each and those sold on October 2nd were sold for about $17.50 each. Tilley maintained that he sold the shares in Poseidon because the figure to which the share prices has risen was a completely unrealistic figure and that he as one experienced in mining shares knew that where only eight drill holes had been put down that the market was behaving, if I may use my own word, irrationally, in the price being offered for shares in such a company without proof of some real discoveries of minerals. It was common ground that Tilley did not ask Mr. Shierlaw's advice before selling the shares, nor did he have very much more knowledge at the time when he sold the shares than he had when he purchased them, except for the announcement that Poseidon had encountered nickel sulphites and that eight of their drill holes in the area were high grades and that was the result (presumably he meant cause) of the share market rising. Tilley denied throughout that he had bought the shares ``taking a punt on his (i.e. Shierlaw's) advice'', i.e. he had not bought them as a speculative investment which could be turned over as soon as the price rose.

Tilley and the appellant gave evidence before the Board. Shierlaw was not called as a witness although his evidence, if to the same effect as Tilley's, would have been very valuable as corroborating Tilley's explanations.

The evidence taken before the Board of Review was put in before me and no other evidence was called. I should say in that respect that Mr. Tilley died between the date of the decision of the Board, 30th September 1975, and the date on which the matter came on for hearing before me, on 7th December 1976, so that the appellant had no other evidence to put before me except the evidence of Mr. Shierlaw if she had thought it helpful to her cause.

The Board did not reserve judgment but gave their decision as soon as counsel had presented their arguments. It is regrettable that the decision was not reserved in that I think that, had it been given with the precision that a written judgment usually possesses, and if it had not been expressed as colloquially as an ex tempore judgment often is, there might not have been any appeal to this Court. This I shall deal with later in the judgment.

Before I deal with the main arguments between the parties, it is convenient to deal with three subsidiary points which were argued at considerable length before me.

The first, which was principally argued by counsel for the Commissioner, was that the judgments of the majority judges in in
Gauci & Masi v. F.C. of T. 75 ATC 4257; (1975) 50 A.L.J.R. 358 were inconsistent with other judgments of the High Court and therefore should not be followed. I pointed out to counsel and I reaffirm that if there was any such inconsistency and I am not saying that there is, then it would be presumptuous for me, sitting as a Judge of the Supreme Court, to endeavour to reconcile what was said to be the opposing views. That is a matter for the Full High Court of Australia, not for me. I simply record that the argument was put to me so that if the matter goes on appeal to the High Court, it will be known that counsel did in fact take the point before me. Like Sheppard J., who apparently had a similar argument put to him in
Macmine v. F.C. of T. 76 ATC 4350 at p. 4358, I am bound by the most recent pronouncement of the High Court on the matter, namely that in Gauci's case and it is my duty simply to apply the law as it is laid down in that case. In any case I do not understand their Honours the Chief Justice and Mr. Justice Jacobs in Gauci's case to be throwing any doubt upon the long established rules of evidence in relation to self-serving statements but rather to be correcting what appeared to have become a misapprehension in relation to the caution with which, it was said, Courts

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should receive statements of that kind. Argument was also put to me in relation to Gauci's case as to whether sec. 190 of the Income Tax Assessment Act cast any presumption on an appellant taxpayer, a matter to which I shall return later. Dealing with the point as to whether or not there was any onus on the appellant to convince the Board that her purpose, or rather in the circumstances the purpose of her husband in purchasing the shares was not to make a profit by their resale whenever she might conveniently dispose of the shares of any of them, I accept that there is no such onus cast on her and it is simply a question of what at the end of the day the totality of the evidence leads the Court to decide. In considering this case I have treated the evidence of Mr. Tilley as being self-serving in the respect that it served his wife's purpose and he was her agent, but I have taken the law to be that laid down by Isaacs J. in the High Court in
Fremlin v. Fremlin (1913) 16 C.L.R. 212 at pp. 234-235 which has been referred to many times on this subject. The self-serving statements in that case were related to domicil but it seems to me that the principle holds good over the whole range of the law of evidence. Isaacs J. said:

``Naked assertion without deeds and acts would be useless, and assertion inconsistent with deeds and acts is equally useless to control them... Nevertheless, they (sc. declarations) are to be tested and appraised, and are not to be ignored. If the declarant is not found to be untrustworthy, and if his declarations be not opposed to the clear inference otherwise to be drawn from his conduct, it is impossible to deny them weight.... Therefore the question is here, not so much whether the circumstances of his English residence tend to prove English domicil, as whether, the man swearing to his intention to create an English domicil, there are such circumstances on the other side as warrant the court throwing over his oath and disbelieving him.''

Here it is not a question of disbelieving Tilley. He was a witness of credit and was so treated by the Board, but an honest witness may still be wrong or mistaken without giving intentionally wrong evidence and one does not need to disbelieve a witness on his oath to reject parts of his testimony which are not in accord with or do not satisfactorily explain parts of the factual situation out of which the statements arise: see also an article The Significance of Gauci's Case by J.D. Davies in 5 A.T.Rev. at p. 215 especially at pp. 216-217.

The second point was whether sec. 190(b) of the Income Tax Assessment Act should be applied by me in determining the appeal from the Board. If it did apply it was argued that it cast an onus on the appellant which she had to discharge and I was referred again to Gauci's case and to other cases. I am of opinion that sec. 190 on its wording probably does not apply to an appeal to this Court from a Board of Review. As Fullagar J. pointed out in
F.C. of T. v. Finn (1960) 103 C.L.R. 165 at 170, sec. 190 commences with the words ``Upon every such reference or appeal'' and ``every such reference or appeal'' must refer back to sec. 187 which deals with references to a Board of Review for review and appeals from the Commissioner to the Supreme Court of a State for hearing and determination. Appeals from a Board of Review to a Supreme Court Judge come under sec. 196 of the Act and cannot on the ordinary construction of the English language be brought within ``any such reference or appeal'' in sec. 190. However I do not think the point matters greatly in the result, because as Walsh J. pointed out in
Krew v. F.C. of T. 71 ATC 4213 at p. 4216, ``Even if it be accepted that sec. 190(b) has no direct application in an appeal to this Court from the Board of Review (F.C. of T. v. Finn 103 C.L.R. 165 at p. 170), it remains true that in this Court the appellant must show that the Board of Review's decisions were wrong....'' In other words I take it that the appellant before me had the ordinary duty cast on an appellant who on appeal contends that a decision below should be upset: he or she has to show that the impugned decision is wrong; see for example the judgment of Lord Wright delivering the advice of the Privy Council in
Grant v. Australian Knitting Mills Limited (1936) A.C. 85 at p. 97.

The third preliminary question that was argued before me was whether I was limited to deciding, as I had not seen the witnesses, whether the Board's conclusion was right on the facts and reference was made to the judgment of Windeyer J. in
Buckland v. F.C. of T. (1960) 12 A.T.D. 166 at p. 169. However, in my opinion the appeal before me was a full

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rehearing and it is my duty to consider for myself the evidence given before the Board and the surrounding facts and to come to my own decision on that evidence and those facts. It is true that the Board had the advantage of seeing the witnesses and I have not and I must therefore make the usual allowances for appraisal of evidence by a tribunal which has not had the advantage of seeing and hearing the witnesses as against one which has. Nevertheless, despite the arguments put to me, I think that that is what Windeyer J. did in fact do in Buckland's case. He says:

``Having carefully considered the evidence and the reasons given by the Board, I think that that conclusion, (i.e. a conclusion adverse to the taxpayer) was clearly open.''

Similarly in this case I regard it as my duty to go through the evidence, the total factual situation, and the arguments put to me and make up my own mind as to what in my opinion should be the correct judgment, whilst never losing sight of the fact that the Board had the inestimable privilege which I have not had, of seeing, hearing and weighing the oral testimony.

The parties did not dispute that a question of law arose on this appeal, namely the proper construction of sec. 26(a) of the Income Tax Assessment Act and that being so, the question of fact namely how do the facts as they are found to be, match with the section after it has been construed, also fell for consideration by me.

I accept as has been laid down in a long series of cases since
Evans v. D.F. C. of T. (S.A.) (1936) 55 C.L.R. 80 at p. 99 that the ``purpose'' of which the section speaks is the dominant purpose actuating the acquisition of the assets and that whilst there may be more than one purpose to be served in the mind of the taxpayer, or in this case the taxpayer's agent, by the acquisition of the shares, it must be possible to say that the purpose which is struck at by sec. 26(a) was in fact the dominant purpose actuating the taxpayer or as here taxpayer's agent, at the time of the acquisition of the shares.

Further, in consonance with the judgment of the Privy Council in
McClelland v. F.C. of T. 70 ATC 4115; (1970) 120 C.L.R. 487, I have to be satisfied that the transaction of acquisition and resale must exhibit features which give it the character of a business deal: see the judgment of Barwick C.J. in
A.L. Hamblin Equipment Pty. Limited v. F.C. of T. 74 ATC 4310 at p. 4314.

With these observations I turn then to the grounds of appeal.

Ground 1 is simply the usual ground in these appeals: that the decision of the Board of Review was wrong in fact and in law.

Ground 2 is the first one of substance. It reads:

``Having found:

`Although it was not so stated, we take it that Mr. Tilley's intention was that the shares be purchased as an investment.... We take it that what Mr. Tilley meant was that the shares were acquired to be held in the long-term for the dividends which might be expected to be produced in three to five years' time.'

The Board of Review erred in law in finding that the profit arising from the sale of the shares was assessable income.''

In order to consider ground 2, it is necessary for me to add the missing words from the third line of the quotation taken from pp. 77-78 of the transcript and also the clauses which immediately follow the words ``three to five years' time''. The missing words are ``Certainly, so far as the objective facts are concerned, as soon as the market moved up, they were sold, but giving the evidence the best complexion'', and then the balance of the quotation follows in the remainder of the sentence which is in the notice of appeal, but the words which follow the quoted part are also important. ``It is significant, of course, that Mr. Tilley said at that time that he did not even know what mineral Poseidon were looking for. He made no enquiries about the company and did no more than purchase the shares on what Mr. Shierlaw suggested. Incidentally, I think the evidence was that Mr. Shierlaw suggested the acquisition of `a few shares'. I suppose that is a relative term in any event.'' Taking the whole of the passage together, it is obvious that the Board were not there finding Mr. Tilley's intention as a fact, but rather, giving the evidence the best complexion they could, that is: the most favourable complexion from Mr. Tilley's point of view as stated, what the substance of his evidence amounted to if accepted. The other parts which were left out in the

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quotation, but which I have added, show that the Board were critical of Mr. Tilley and were simply setting his explanation of the matter into its background. Accordingly I do not think ground 2 is made out. These were not findings of fact as claimed, but merely a narrative of the case the plaintiff was seeking to make out.

Ground 3 reads:

``The Board of Review erred in finding, if it is a finding of fact:

The attitude of Mr. Tilley in acquiring the shares and in selling the shares is indicative of a situation where he decided he would acquire the shares and decide later on whether retention or resale would best serve his purpose.... Nobody could be expected to hold the shares, but his attitude (when deciding to sell the shares) is consistent with one which was no more than this: that he would buy the shares without any inquiry as to the potential of the company and subsequently when something had been done to indicate the worth or otherwise of the mine, he would decide whether or not the shares would be sold.'

The words in brackets are not the words of the Board of Review.

In the alternative if the above is a finding of fact then it is not justified by and contrary to the evidence and the weight of it and is inconsistent with the finding of fact referred to in para. 2 hereof.

In the further alternative having found as aforesaid, the Board of Review erred in law in finding that the profit arising from the sale of the shares was assessable income.''

Here the two quotations do not follow one another in the judgment. The second half of the quotation comes before the first half. The sentence beginning ``The attitude of Mr. Tilley'' is the last sentence on the last main paragraph on p. 79. The second half of the quotation is in the preceding paragraph just above the centre of p. 79. It is somewhat difficult to deal with sentences taken out of context and out of order in this regard and I think it would be as well if ground 4 were taken with ground 3.

Ground 4 reads:

``The Board of Review erred in finding:

`Now that is exactly the sort of situation (being the situation set forth in para. 3 hereof) which was considered in Buckland's case....

Now that is consistent when we have the facts in this case,'

The words in brackets are not the words of the Board of Review.''

In order to understand the argument as it was put to me, it will be better if I quote the whole of the paragraphs from which these excerpts have been taken in the notice of appeal.

``One would have thought that whatever assay results had been obtained from these test holes would only confirm the probable worth of the mine, but acting on his own initiative and without seeking any advice from Shierlaw, he decided to sell. His attitude in selling was completely at variance with his attitude at the time of purchase. He made no inquiries about the prospects of the company and did not even know what it was engaged in prospecting for. On the other hand, when there had been some assay results and later bore holes he decided with his knowledge of what was involved in proving and developing a mine that the shares were an unrealistic price and should be sold.

It is quite significant in that regard that in his evidence-in-chief he said, `No-one should be expected to hold shares when the price goes beyond all reality'. As a statement I think that is possibly quite true. Nobody could be expected to hold the shares, but his attitude is consistent with one which was no more than this: that he would buy the shares without any inquiry as to the potential of the company and subsequently when something had been done to indicate the worth or otherwise of the mine, he would decide whether or not the shares would be sold.

Now that is exactly the sort of situation which was considered in Buckland's case. I have not got the report here but it is actually reported in 12 A.T.D. p. 166. It was decided by Mr. Justice Windeyer, and I think at p. 169 this passage is to be found. As I say, I have not got the report but the passage is quoted in a reference by the board, and it is this:

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• `But a person might well buy something simply because of his belief that, either by resale or by retention as an investment, acquiring it would prove profitable, and that not until after acquisition could he decide whether retention or realisation would best answer his purpose.'

Now that is consistent when we have the facts in this case. The attitude of Mr. Tilley in acquiring the shares and in selling the shares is indicative of a situation where he decided he would acquire the shares and decide later on whether retention or resale would best serve his purpose.''

The argument that was put to me on behalf of the taxpayer was that, consistently with the judgment of Windeyer J. in Buckland v. F.C. of T. and in particular with the passage that is referred to in the ground of appeal, the Judge was saying in Buckland's case and the Board were finding in reliance on that judgment, that the taxpayer need have no purpose in mind at the time of the acquisition and can still be brought to tax if he formed the purpose of disposing of the shares by resale at a profit later. I do not think that is so. I think, with respect, that Windeyer J. was dealing with the normal rule, that is that the dominant purpose must have been held at the time of acquisition of the asset and not at any other time; see a short passage from his judgment on the same p. 169, which is not referred to in the notice of appeal.

``The partners, when they bought the ship, may have had in mind to float her off if possible, and been optimistic enough to think, given good weather, they might succeed in doing so. But that does not mean that the only possible inference from the evidence is that their dominant purpose was to acquire a capital asset - that their purpose in buying the vessel was to enter the business of ship owners.''

That passage clearly refers to the dominant purpose of the taxpayer at the time of purchase. If there had been any doubt as to his Honour's understanding of the operation of sec. 26(a) it is sufficient to refer to his judgment in
Elsey v. F.C. of T. 69 ATC 4115 at p. 4123; (1969) 121 C.L.R. 99 at p. 114 where he says:

``In my opinion the Commissioner's claim must be upheld - under the second branch of para. (a) of sec. 26, not under the first branch. I say this because I do not think that the land was `acquired for the purpose of profit-making by sale'. That expression predicates, I consider, that the sole or dominant purpose for which a taxpayer acquired property which he later sold was to sell it at a monetary profit - that is to say, to sell that very property for more than he paid for it.''

There is no doubt in my mind that on the cases, that purpose must have been present at the time of acquisition: see the judgment of Barwick C.J. in
Steinberg & Ors. v. F.C. of T. 75 ATC 4221 at p. 4225; (1975) 7 A.L.R. 491 at the bottom of p. 494. The passage referred to by the Board from the judgment in Buckland's case was clearly so understood by Walsh J. in
Eisner v. F.C. of T. 71 ATC 4022 at p. 4032 where he says:

``On my view of the evidence, the dominant purpose was to retain it, even if the appellant had it in mind that if later the land were to be sold it could be sold at a profit: see Buckland v. F.C. of T. (1960) 34 A.L.J.R. 60 at p. 62.''

It is clear from a later passage in the decision of the Board that they thought that the acquisition and the impugned purpose had to co-exist. They say:

``For those reasons we think the taxpayer has failed to discharge the onus of proving that the shares were not acquired for resale at a profit. When I say the taxpayer, of course I mean the purpose is the one which is imputed to her, the purpose in fact being that of her husband.''

In my opinion the Board did not go wrong in directing themselves on the law, even though, as the judgment was an ex tempore judgment, they have not expressed themselves as clearly as might have been wished. In any case the facts, as I shall show later, do in fact bear out the decision. Before I deal with that, it may be convenient to refer to grounds 5 and 6 of the appellant's argument, as they are merely the consequence of the argument submitted in reliance on grounds 3 and 4. They are as follows:

``5. The Board of Review erred in finding: `The taxpayer has failed to discharge the onus of proving that the shares were not acquired for resale at a profit'.''

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``6. The Board of Review should have found that the sale of the Poseidon shares was the realization of a capital asset and not a revenue receipt.''

I turn now to a consideration of the facts in the case. There is no doubt that on the taxpayer's side there is the clear and unshaken evidence of Mr. Tilley that he bought the shares as an investment and not for resale at a profit. One has then to consider the surrounding circumstances and matters connected with the case. They are as follows:

1. If that was the opinion he formed it must have been based on advice from Shierlaw. Shierlaw, it is not disputed, was available and was not called as a witness on the matter, either before the Board or before me As Gibbs J. said in
Jacob v. F.C. of T. 71 ATC 4192 at p. 4194, referring to a somewhat similar situation:

``The failure to call Dunham as a witness is quite unexplained and leads to an inference that his evidence would not have helped the appellant's case:
Jones v. Dunkel (1959) 101 C.L.R. 298 at pp. 320-1.''

2. The sales of the shares were between five and six months later than the date of the acquisition. In my opinion those sales are sufficiently proximate in time to the acquisition to infer that they were purchased for the purpose, or at least the dominant purpose, of resale at a profit. As Barwick C.J. said in Gauci's case, to which I have previously referred, at p. 158:

``If, on the other hand, the acquired property is resold within what may fairly be described as a time proximate to its acquisition, the requisite purpose (sc. the purpose referred to in sec. 26(a)) may be inferred. Thereafter, the taxpayer must overcome the prima facie inference there drawn.''

and his Honour goes on a little further down:

``The question in the application of sec. 26(a) is not whether the taxpayer, when purchasing, hoped that at some time in the future he could sell the land at an enhanced value. The question is whether he was then intending to sell at a profit, doing so as a matter of `business'. The purchase of land as a long term investment or as a hedge against the depreciating value of money does not, in my opinion, come under sec. 26(a).''

(The emphasis is mine.)

3. Mining shares of this kind are hardly what a prudent chartered accountant would characterize as an investment, and a fortiori when he knew as little about them as Tilley did of these shares.

4. The next question therefore is to consider the explanation which Tilley gave: namely that because of his long expertise in accountancy and mining matters, he could see that as the price of the shares was rising in what I might call an unfounded and ridiculous manner, therefore he should, as a prudent investor, sell out immediately and no conclusion adverse to him should be drawn from his doing so.

In appraising his evidence the Board said:

``We now come to consider the circumstances related to the sale of the shares. At that point Mr. Tilley's recollection was somewhat vague.''

The fact was that Tilley tried to explain the sale of the shares as having taken place partly on a Friday and partly on the following Monday and that this was the reason for the two sales, namely that the second sale could not be effectuated before the Stock Exchange closed on the Friday. One glance at the calendar for 1969 indicates that that is not correct. September 30, 1969 was a Tuesday and October 2 was a Thursday. The Board thought that not a great deal turned on that beyond giving an indication of the difficulty of recalling events long after they happened. Nevertheless it was a wrong explanation and it was the only explanation which Tilley gave for the dates of sale. As to the reasons for sale, he had to admit that although he knew nothing about Poseidon, he did not consult Mr. Shierlaw whom he clearly regarded as an expert in that matter, as to whether or not it was prudent to sell or retain the shares. Tilley made no enquiry from Shierlaw or anyone else as to return on investment or as to the extent of the ore body or as to what exactly was being mined before he bought the shares. He is, on everyone's say so, an experienced chartered accountant. He is to my mind not buying as an investment when he knows nothing about the shares and takes no advice on their quality as an investment. That is strengthened by the fact

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that as soon as the price has gone up sufficiently he sells; he does not ask anybody else's view as to whether it would be more prudent to hold on longer and treat the shares as being a good long term investment. One must also keep in mind the fact that he bought other mining stocks with resale at a profit in mind during the same year and there is nothing, so far as one can see, in the evidence which differentiates in his mind the purchase of Poseidon shares from the purchase of any other mining stock, except that Poseidon might properly be regarded as a ``tip'' from Mr. Shierlaw. In other words one asks oneself what distinguishes the Poseidon purchase from all the other purchases which it is admitted were for resale at a profit and the answer must be only the ``say so'' of the witness Tilley. I think that it was impossible for him, even with his experience, to characterise this as an investment. He knew nothing of nickel mining. He made no enquiries sufficient to indicate to him that there was investment potential in holding the shares. He equally made no enquiry before he sold the shares to find out whether he was disposing of an investment of shares which were a good investment potential.

5. I find nothing in the circumstances given in evidence which would distinguish this purchase of shares from the others which it is admitted were purchased for the purpose of profit-making by sale. The number of such dealings in that tax year give the sales in question in these proceedings, when set in the context of all the dealings to which I have referred, the necessary characteristics of business dealings.

Mr. Debelle, for the Commissioner, also criticised the appellant for not calling a man named Croft who was in the office of her late husband. Croft prepared answers to the Commissioner of Taxes whilst Tilley was away overseas, a large part of which answers Tilley repudiated in his evidence as being incorrect. I do not regard this as telling against the appellant. It was known that Croft was at Darwin, or somewhere else in the Northern Territory, and not available to be called, and whilst it would have been helpful to know why the wrong answers were given to the Commissioner of Taxation, I do not think that the failure to call Croft is really of importance in the final assessment of the case. On the other hand, as I have already indicated, I think it was a very serious flaw in the appellant's case not to have called Shierlaw as a witness either before the Board or before me.

Taking Tilley's denial that he bought the shares for the purpose of resale at a profit on the one hand and matching it with the matters which I have stated above, in my opinion the Board was justified in finding that the taxpayer failed to discharge the onus of proving that the shares were not acquired for resale at a profit. Equally as an appellant she has failed to persuade me that the judgment below was wrong. In my opinion the proper conclusion from the facts in evidence as they stand, is that on the balance of probabilities the taxpayer's late husband did in fact acquire the shares of Poseidon Limited for the purpose of profit-making by sale. That being so this appeal must be dismissed.

The last ground of appeal is 7 and it reads:

``The Board of Review erred in finding that the respondent or his Deputy was entitled to issue an amended assessment.''

I agree with the Board of Review that this ground stands or falls along with the principal finding in the case and counsel did not dispute that before me. If in fact the shares were purchased for resale at a profit, then there was not a full and true disclosure and the Commissioner was entitled to act as he did.

Having regard to the way in which the reasons for decision below were expressed, I desire to hear the parties as to costs.