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.