Californian Copper Syndicate v Harris

JurisdictionEngland & Wales
Judgment Date01 July 1904
Date01 July 1904


HARRIS (Surveyor of Taxes)

Income Tax, Schedule D, Case 1. - Company formed for the purpose, inter alia, of acquiring and reselling mining property; after acquiring and working various property, it resells the whole to a second Company, receiving payment in fully paid shares of the latter Company.

Held, that the difference between the purchase price and the value of the shares for which the property was exchanged is a profit assessable to Income Tax.

At Meetings of the Commissioners for the General Purposes of the Income Tax Acts, and for executing the Acts relating to Inhabited House Duties for the Lower Ward of the County of Lanark, held at Glasgow on the 9th day of February and the 28th day of April 1904.

The Californian Copper Syndicate (Limited and Reduced) thereinafter referred to as the Company) appealed against the following assessments made upon them under Schedule D of the Income Tax Acts, in respect of the profits of the business carried on by them, that is to say, an assessment of £10,000 (duty £625) for the year ending the 5th April 1903, and an assessment of £20,000 (duty £916 13s. 4d.) for the year ending the 5th April 1904. The following facts were admitted or proved:-

I. The Company was incorporated on 5th February 1901, under the Companies Acts 1862 to 1900, as a Company limited by shares. The registered office of the Company is situated at No. 188 St. Vincent Street, Glasgow.

II. The objects for which the Company was established are set forth in the third article of its memorandum of association, and embrace,inter alia, the following objects, viz.:-

  1. (1) To acquire copper and other mines, mining rights, metalliferous and auriferous land, in California or elsewhere in the United States of America, and any interest therein, and in particular to acquire the mines known as "M'Kinley," "Last Chance," "Heiskell," "M'Kinley Extension," and "Heiskell Extension," situate in the

    county of Fresno, state of California, in the United States of America, and with a view to the acquisition of such last mentioned mines, to adopt and carry into effect, with such (if any) modifications or alterations as may be agreed upon, but subject as to modifications or alterations agreed on prior to the statutory meeting, to the approval of such meeting the agreement referred to in clause 3 of the Company's articles of association, also to prospect and explore for the purpose of obtaining information, and also to acquire and enter into treaties and contracts and engagements of any description, and either absolute or conditional, with respect to mines, mining rights, minerals, lands, forests, harbours, water rights, rivers, and property of every or any nature situate in any part of the United States or elsewhere; and to negotiate for and acquire concessions, privileges, and rights, absolute or conditional, from any sovereign powers, rulers, governments, or states, or person or persons, or from any corporate or other body, and to enter into any arrangement with any government, ruler, or authority, municipal or otherwise, for any purposes or to any effect, and from time to time to alter and vary the same accordingly.
  2. (2) To carry on mercantile, commercial, trading, and financial businesses of any and every description, either as principals or agents, and to buy, sell, and enter into contracts, either absolute or conditional, in respect of stocks, shares, debentures, debenture stock, bonds, obligations, options, and securities, of every or any description, in any part of the world.

  3. (4) To work, win, quarry, convert, manufacture, use, crush, wash, smelt, reduce, refine, or otherwise treat and render marketable, and sell or otherwise dispose of or deal in metalliferous quartz and ore, and other mineral and metal substances and products, and precious stones and produce of every description.

  4. (10) To establish, form, and subsidise, or otherwise assist in the establishment, promotion, or formation of any other companies having for their objects, or some of them, any of the objects mentioned in this memorandum; or the prosecution of any other undertakings or enterprises of any description having objects which may advance directly or indirectly, the objects of this Company, and to secure by underwriting or otherwise the subscription of all or any part of the share or loan capital of any such company, and to pay or receive any commissions, brokerage, or other remuneration in connection therewith.

  5. (17) To sell, lease, charter, or otherwise dispose of absolutely or conditionally, or for any limited interest, the whole or any part of the undertaking, property, rights, concessions, or privileges of the Company for such consideration in cash, shares, or otherwise as the Company may think fit, and to abandon any part of the business for the time being of the Company, and to carry on any of the objects mentioned in this clause to the exclusion of the others.

  6. (18) To subscribe for, purchase, or otherwise acquire the shares or stock, whether ordinary, preferred, or deferred, or the debenture bonds, or other securities of any company, and to accept the same in payment for any property sold, or business undertaken, or services rendered by this Company, and to...

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73 cases
2 books & journal articles
  • Revenue and Tax Law
    • Singapore
    • Singapore Academy of Law Annual Review No. 2014, December 2014
    • 1 December 2014
    ...income and non-taxable capital gains can be found in the seminal case of Californian Copper Syndicate (Limited and Reduced) v Harris(1904)5 TC 159 at 166, where the Lord Justice Clerk articulated the timehonoured test: What is the line which separates the two classes of cases may be difficu......
  • The historical significance of the High Court's decision in Federal Commissioner of Taxation v. The Myer Emporium Ltd.
    • Australia
    • Melbourne University Law Review Vol. 31 No. 1, April 2007
    • 1 April 2007
    ...(30) Commissioner of Taxes (Vic) v Phillips (1936) 55 CLR 144, 156 (Dixon and Evatt JJ). (31) Californian Copper Syndicate Ltd v Harris (1904) 5 TC 159 ('Californian Copper'); Ducker v Rees Roturbo Development Syndicate Ltd [1928] AC 132, 141-2 (Lord Buckmaster) ('Ducker'); Edwards v Bairst......

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