Daniel James Van Der Westhuizen v The Commissioner of Taxes ((1963 - 1964) Z and NRLR 154) [1964] ZMHCNR 4 (4 December 1964)

DANIEL JAMES van der WESTHUIZEN v THE COMMISSIONER OF TAXES (1963 - 1964) Z and NRLR 1963 - 1964 Z and NRLR p154 [Before the Honourable Mr. Jus�ce CHARLES on the 4th December, 1964.] Flynote Income Tax - meaning of " ordinarily resident " and " carrying on business '' - sec�on 86 (2) (a) of the Income Tax Act, 1954. Headnote The appellant had ceased to reside in Northern Rhodesia during 1961, although he returned to the country from �me to �me to stay with his children. He also retained certain business interests in Northern Rhodesia and pursued them during his brief return visits to the country. He appealed against his being assessed for supertax during the assessment years ending on the 31st March, 1962, and the 31st March, 1963, respec�vely, on the grounds that during those years he was neither ordinarily resident nor carrying on business in Northern Rhodesia. Held: That he was ordinarily resident in Northern Rhodesia �ll the 27th April, 1961, but therea�er he was not so ordinarily resident, nor was he carrying on business in Northern Rhodesia. He was accordingly assessable for the tax year 1961 - 62, but not for the year 1962 - 63. [ Appeal against assessment for 1961 - 2 dismissed. Appeal against assessment for 1962 - 63 allowed. Cases cited: (1) Levene v Inland Revenue Commissioners [1928] AC 217; [1928] All ER Rep. 746. (2) Inland Revenue Commissioners v Lysaght [1928] AC 234; [1928] All ER Rep. 575. (3) Cohen v Commissioners of Inland Revenue (1945) 13 SATC 362. (4) Smith v Anderson (1880) 15 Ch. D 247. (5) Income Tax Case No.883 (1959) 23 SATC 328. (6) Estate G v Commissioner of Taxes (1964) 26 SATC 168. (7) Cornelius v Phillips [1918] AC 199. (8) Modderfontein Deep Levels Ltd. and another v Feinstein [1920] TPD 291. (9) Gramophone and Typewriter Ltd. v Stanley [1908 - 10] All ER Rep. 833. (10) Tunstall v Steigmann [1962] 2 All ER 417. E T E Martin for the appellant R Russell Cook for the respondent 1963 - 1964 Z and NRLR p155 CHARLES J [Editorial Note]The section has been amended since the dissolution of Federation, but not in aspects material to this decision.] Judgment Charles J: These are two appeals by a taxpayer in respect of charges for supertax on dividends received by him during two assessment years: the year which ended on the 31st March, 1962, and the year which ended on the 31st March, 1963, respec�vely. The grounds of appeal are that he had ceased to be ordinarily resident and to carry on business in Northern Rhodesia within the meaning of the proviso to sec�on 86 (2) (a) of the Income Tax Act, No. 16 of 1954, on and a�er the 27th March, 1961, and that, accordingly, he was not liable to supertax. The facts, which are not in dispute, are as follows: (a) The appellant was born in Cape Province, South Africa, and is a South African na�onal. He came to Northern Rhodesia in 1947, a�er having been twenty years in South - West Africa. (b) In Northern Rhodesia the appellant, apparently, formed an incorporated company, which I shall call " the A company ", in which he held 19,000 shares and his wife held 1,000 shares of a total of 20,900 issued shares. He was a director of that company. He also acquired 19,878 shares, fully paid up in another company, which had been incorporated in Northern Rhodesia, and which I shall call " the B company ". (c) The appellant also became the owner of three leasehold premises in Lusaka, two being industrial leaseholds and the third being a residen�al leasehold. He let the industrial leaseholds to the A company at a rental of £70 per month. He also received in addi�on, £130 per month from the company, for what does not appear. He resided on the residen�al leasehold. (d) Early in March, 1961, the appellant decided to re�re and return to South Africa and, pursuant to that decision, he le� Northern Rhodesia on the 27th April, 1961, and went with his wife to South Africa. There he stayed with his sister - in - law for about six months un�l he had built a house in which he and his wife now reside. (e) Before leaving Northern Rhodesia, the appellant sold all his household belongings by public auc�on. He also, on the 8th March, 1961, par�cipated in making four appointments to the board of directors of the A company. On the 31st March, 1961, he was a party to a resolu�on of the then board of directors for ves�ng the par�al management of the A company in two members of its board. He con�nued to be a director, and the gran�ng of approval of all capital expenditure exceeding £100 per annum was reserved to him and he was to receive a monthly report on the affairs of the company. The rent payable by the company to the appellant in respect of the industrial leaseholds was also increased to £300 per month. Apparently the payment of the £130 per month, addi�onal to rent, was discon�nued. (f) The appellant's return to South Africa was subject to an arrangement with his wife that she would visit twice each year their two children and six grandchildren who were living in Northern Rhodesia. In accordance therewith, apparently, he returned to Lusaka on the 11th December, 1961, and le� 1963 - 1964 Z and NRLR p156 CHARLES J on the 8th January, 1962. During that visit he stayed with his two children. In 1962 appellant was visited in South Africa by one of his two children and her children. He brought them back by car to Lusaka on the 5th May, 1962, and he stayed there for a month with both of his children, and then returned to South Africa. The appellant again returned to Northern Rhodesia in December, 1962, and went back to South Africa in the following month. This visit was divided between his two children. On the 27th June, 1963, the appellant brought his wife to Lusaka and then, about a week later, he went alone to South - West Africa for the purpose of visi�ng old acquaintances. About a month or six weeks later he returned to Lusaka and on the 14th September, 1963, a�er about two weeks, he took his wife back to South Africa. The appellant again visited Northern Rhodesia for a month in December, 1963, for the purpose of spending Christmas with his children. (g) The appellant gave to each of his two daughters and sons - in - law a hundred shares in the A company when he le� Northern Rhodesia in April, 1961, but he con�nued as a director of that company. He also retained his shares in the B company as he was unable to sell them. (h) On his visits to Northern Rhodesia, the appellant used to atend company mee�ngs and to inspect the plant and factory of the A company. He also consulted an agent about selling the residen�al leasehold and, eventually, let it, as from the 1st May, 1961, at a rental of £30 per month. (i) In December, 1963, the appellant sold the industrial leaseholds to the A company for £18,000, which price he advanced at interest at 18 per cent per annum. This year he sold his shares in the A company a�er efforts which had commenced in 1958. The first appeal relates to dividends received by the appellant from the A company and the B company in the assessment year 1st April, 1961, to the 31st March, 1962, a�er 27th April, 1961, when the appellant le� Northern Rhodesia for South Africa, and the second appeal relates to dividends received by the appellant from the A company in the assessment year, 1st April, 1962, to the 31st March, 1963. The relevant provisions of sec�on 86 of the Income Tax Act, No. 16 of 1954, under which these appeals have to be determined are: "(1) The supertax income in the case of a company liable to supertax or of any individual for any year of assessment shall be the taxable income of such company or individual as determined in terms of Part II for the same year of assessment, with the addi�ons and deduc�ons set out in this sec�on. (2) To the taxable income there shall be added - (a) in the case of a company liable to supertax or an individual, all amounts, other than amounts which have already been included in such taxable income, 1963 - 1964 Z and NRLR p157 CHARLES J received by or accrued to such company or individual during the year of assessment by way of dividends from sources within the Federa�on: Provided that in the case of an individual who was neither ordinarily resident nor carrying on business in the Federa�on, no dividends from sources within the Federa�on shall be added if such dividends have not already been included in taxable income. (b) in the case of an individual, all amounts received by or accrued to such individual during the year of assessment by way of dividends from sources outside the Federa�on: Provided that - (i) in the case of any individual who was not ordinarily resident in the Federa�on throughout the year of assessment, there shall not be added any dividends so received or accrued during such por�on of that year as he was not so ordinarily resident; (ii) in the case of an individual who was ordinarily resident in the Federa�on during the year of assessment, there shall not be added any dividends so received or accrued from a company whose income tax has been appor�oned under the income tax laws of the Union (Republic) of South Africa if . . ." It is clear that the proviso to sec�on 86 (2) (a) only applies to exempt the appellant if two condi�ons were sa�sfied: that he was not ordinarily resident in the Federa�on at the relevant �me; and that he did not carry on business there at the relevant �me. If either one of those condi�ons was not sa�sfied in respect of the par�cular year of assessment to which an appeal relates, the appeal fails. The respondent's case is that, in respect of both years, neither condi�on was sa�sfied; the facts set out in placitum (b) above showing that the appellant, notwithstanding his removal to South Africa, either con�nued to be, or again became, ordinarily resident in Northern Rhodesia, and the facts set out in placita (e), (g), (h) and (i) showing that he had con�nued to carry on business in Northern Rhodesia. With regard to the first appeal, it has also been argued for the respondent that as the appellant was ordinarily resident and carrying on business in Northern Rhodesia un�l 27th April, 1961, he was liable on that account to have all dividends added for the year of assessment 1961 - 1962, since it is sufficient to exclude the applica�on of the proviso if the taxpayer had been ordinarily resident or carrying on business in the late Federa�on for any part of the relevant year of assessment. As indicated at the outset, the appellant controverts that case en�rely. In respect of the later submission, it was argued on his behalf that he is only liable in respect of dividends received at the �me while he was ordinarily resident in the Federa�on. 1963 - 1964 Z and NRLR p158 CHARLES J The ques�ons which thus arise on these appeals are: (i) What is the meaning of " ordinarily resident " as used in the proviso to subsec�on (2) (a)? (ii) What is the meaning of " carrying on business " as used in that proviso? (iii) Does sec�on 86 (2) (a) apply to all dividends received or accrued to a taxpayer in any year of assessment during which he was only ordinarily resident or carrying on business for a shorter period? The courts have been reluctant to atempt any defini�on of the phrase " ordinarily resident " as used in taxa�on legisla�on. The authori�es show that the phrase is to be construed according to the ordinary or accepted meaning of its cons�tuent words unless the context in which it appears shows a contrary intent. (See Levene v Inland Revenue Commissioners [1928] A. C. 217; [1928] All ER 746 (H. L.); Inland Revenue Commissioners v Lysaght [1928] A. C. 234; [1928] All ER 575.) The verb " reside " is defined in the Oxford Dic�onary as meaning ' to dwell permanently or for a considerable �me, to have one's setled or usual abode, to live in or at a par�cular place ". That defini�on was quoted by Viscount Cave, L. C., in Levene's case[1928] A. C. at page 222; [1928] All ER Rep. at page 749, and all the judgments in that case and in Lysaght's case (supra) were obviously given with regard to it. The defini�on is one of wide scope, covering not only the physical presence of a person in a place for such a period as, having regard to the atendant circumstances, amounts to living or dwelling in the place but, without con�nuous presence, maintenance of a place of abode which is used from �me to �me in a usual or regular course of events by the maintainer. The adverb " ordinarily " is defined in the Oxford Dic�onary thus: " (1) In conformity with rule or established custom or prac�ce; according to setled method; as a mater of regular prac�ce or occurrence; (2) In the ordinary or usual course of events or things; usually, commonly; (3) In an ordinary degree; to a usual extent ". The emphasis in that defini�on is upon con�nuity or regularity of ac�on or event, and the use of the words " usual " and " usually " are in that sense. The adverb, however, has a popular sense, at least in rela�on to residence, which is not recognised in the defini�on, and which, apparently, therefore, is not recognised by lexicographers of the authority of the compilers of the Oxford Dic�onary. That sense may be expressed as being equivalent to " predominantly ". Thus, a person whose duty requires him to live in a country other than his country of origin, and who visits the later country for more or less regular intervals of leave, is commonly regarded as having his ordinary or predominant residence in his country of service since, at the most, he is only temporarily resident in the country of origin on the occasions of his visits. It is with that popular sense of the word in mind, no doubt, that Schreiner, JA, in Cohen v Commissioner of Inland Revenue (1945) 13 S. A. T. C. 362, doubted whether a person could be ordinarily resident in one country while ordinarily resident in another. If I did not feel bound by authority, I would have no hesita�on in concluding that " ordinarily " in connec�on with residence is prima facie used in its popular sense in a taxa�on statute: good sense suggests, in the absence of evidence to the contrary, that the phrase was used by the dra�sman with that meaning in mind. However, the overwhelming weight of judicial authori�es, including those emana�ng from the House 1963 - 1964 Z and NRLR p159 CHARLES J of Lords, is that the lexicographer's defini�on must be accepted as the ordinary and prima facie meaning of the adverb " ordinarily ", as it is etymologically. In both Levene's case (supra) and Lysaght's case (supra) the learned lords expressed their understanding of the meaning of the word in terms which, though varying, were a recogni�on that it was sufficient for a condi�on or event to occur ordinarily if it followed a rule of established prac�ce. (See Levene's case [1928] A. C. at pages 225, 232; [1928] All ER Rep. at pages 750, 754 per Viscount Cave, L. C., and Lord Warrington respec�vely; and Lysaght's case [1928] A. C. at pages 243, 248; [1928] All ER Rep. at pages 580, 582 per Viscount Sumner and Lord Buckmaster respec�vely). Apart from those expressions, the decision in Lysaght's case can only be understood on the basis that, as there was envidence that the taxpayer regularly or consistently returned to England for appreciable periods each year from Ireland, where he was ordinarily resident, he thereby became ordinarily resident in England during the periods of his sojourn. The adop�on of the lexicographical and etymological meaning of " ordinarily " as being the ordinary and prima facie meaning has raised doubts whether the word adds anything to the word " resident " in its ordinary and prima facie meaning. (See, for example, Levene's case, supra, per Viscount Cave, L. C., and Lord Warrington.) I do not share those doubts. In my judgment, it is necessary, in applying the phrase according to the ordinary meaning of its cons�tuent words, to determine first whether the taxpayer was resident in the country at the relevant �me, and then whether his residence was ordinary. If his residence was the result of having a place of abode in the country to which he resorted in a usual or regular course of event, although he was not present at the material �me, his residence would be ordinary, of course, and no further inquiry as to whether it was such would be necessary. In such a case, the answering of the one ques�on would also answer the other. If, however, the taxpayer's residence has to be determined on any par�cular occasion solely with reference to his physical presence in the country, the dura�on of his stay, and such circumstances as his mode of life while in the country, his residence would not necessarily be ordinary: whether it was so or not would depend upon whether it followed or accorded with a regular or usual patern of visi�ng the country. A�er all, it is a sensible legal presump�on, albeit at �mes o�en unrealis�c, that the legislature does not waste words but uses them for a purpose. Applying the foregoing to sec�on 86 (2) (a) of the Income Tax Act, 1954, I can find no manifesta�on in that sec�on, either alone or reading it with the other provisions of the Act, for concluding that the legislature intended to use " ordinarily resident " in any sense other than the judicially accepted and ordinary sense of each of its cons�tuent words. I shall apply it, therefore, accordingly. On the facts before me, I am sa�sfied that the appellant was ordinarily resident in Northern Rhodesia for part of the year of assessment 1st April, 1961, to the 31st March, 1962, namely from the 1st April, 1961, to the 27th April, 1961. He was obviously ordinarily resident in this country before he decided to return to South Africa and make his home there, and he did not cease to be so resident un�l he le� this country. 1963 - 1964 Z and NRLR p160 CHARLES J I am also sa�sfied that, on his return to South Africa, he became both resident and ordinarily resident there both in the judicially accepted meaning of those words and in their popular sense. I am sa�sfied on the facts that he did not again become a resident of Northern Rhodesia by his subsequent visits a�er his departure from the country on the 27th April, 1961. The visits were of rela�vely short dura�on, they were made primarily from a sense of conjugal and parental duty and affec�on, and they were not spent in a house of his own but as a guest in his children's houses. That he also atended to business affairs in the course of his visits does not seem to me to alter the posi�on; his visits were visits and were not so prolonged, on the facts before me, to warrant being elevated into the acquisi�on of residence. A�er all, the appellant could not be expected, because of the primary purpose of his visits, to eschew all ac�vi�es other than dangling his grandchildren on his knees, even if they were of an age to be dangled - as to which later aspect there is no evidence. As I am sa�sfied that the appellant did not again become resident in Northern Rhodesia in the relevant years a�er his departure on the 27th April, 1961, it is unnecessary for me, for reasons already stated, to consider the ques�on whether he again became ordinarily resident here as well as in South Africa. I turn now to consider the phrase " carrying on business ". The authori�es show that the phrase must be taken to have been used in its ordinary commercial sense unless it appears from the par�cular enactment in which it is used that a different meaning was intended. (See, for example, Smith v Anderson (1880) 15 Ch. D. 247; Income Tax Case No.883 (1959) 23 S. A. T. C. 328 at page 330; Estate G v Commissioner of Taxes (1964) 26 S. A. T. C. 168 at page 172 per Beadle, CJ). I am unable to find any manifesta�ons of an intent to use the phrase in a different sense in the proviso to clause (a) of subsec�on (2) of sec�on 86 of the Income Tax Act, 1954. In its commercial sense, the phrase is of wide import. Jessel, M. R, atempted a short defini�on of " business " in Smith v Anderson (supra at page 258), saying that it was " anything which occupies the �me and aten�on and labour of man for the purpose of profit ". He added that it was a word of extensive use and indefinite significance. Later, in the same judgment the learned judge said (at page 260): "There are many things which in common colloquial English would not be called a business, even when carried on by a single person, which would be so called when carried on by a number of persons. That is a dis�nc�on not to be forgoten, even if we were trying the ques�on by the ordinary use of the English language. For instance, a man who is the owner of offices, that is of a house divided into several floors and used for commercial purposes, would not be said to carry on a business because he let the offices as such: but suppose a company was formed for the purpose of buying a building, or leasing a house, to be divided into offices, and to be let out, should not we say, if that was the object of the company, that the company was carrying on business for the 1963 - 1964 Z and NRLR p161 CHARLES J purpose of le�ng offices, or was an once le�ng company, trying it by the use of ordinary colloquial language? The same observa�on may be made as regards a single individual buying or selling land, with this, addi�on, that he may make it a business, and then it is, a ques�on of con�nuity. A man occasionally buys and sells land, as many landowners do, and nobody would say he was a land - jobber or a dealer in land, but if a man made it a par�cular business to buy and sell land to obtain profit, he would be designated as a land - jobber or dealer in land." In the same case, Bret, LJ, said (at pages 227 - 8) that the expression " carries on " implies a repe��on of acts and that it is the repe��on of acts which cons�tute carrying on a business. That must be subject to the qualifica�on that the acts must be similar or related. Moreover, it must be recognised that one act may be sufficient if it were done with intent to do similar or related acts in succession to it and as part of a course of conduct. (See Cornelius v Phillips, [1918] A. C. 199 (H. L.); Modderfontein Deep Levels Ltd. and another v Weinstein [1920] TPD at page 291 per Wessels, J). The foregoing statements are recognised in the following statement by Beadle, CJ, in Estate G. v Commissioner of Taxes (supra at pages 171 - 2) as to the correct approach to the ques�on whether or not a par�cular ac�vity or set of ac�vi�es amounted to carrying on business: "It is quite impossible to define precisely this ' commercial ' meaning so as to have a yards�ck with which to measure any par�cular ac�vi�es. The sensible approach, I think, is to look at the ac�vi�es concerned as a whole, and then to ask the ques�on: Are these the sort of ac�vi�es which, in commercial life, would be regarded as ' carrying on business '? The principle features of the ac�vi�es which might be examined in order to determine this are their nature, their scope and magnitude, their object (whether to make a profit or not), the con�nuity of the ac�vi�es concerned, if the acquisi�on of property is involved, the inten�on with which the property was acquired. This list of features does not purport to be exhaus�ve, nor are any one of these features necessarily decisive, nor is it possible to generalise and state which feature should carry most weight in determining the problem. Each case must depend on its own par�cular circumstances. If a large property in a business area is purchased and this valuable property at the �me contains only a small retail store, but the purchaser con�nued a�er purchase to operate the small store as a store, he would obviously be carrying on the business of the retail store, even if the acquisi�on and running of the store was quite an incidental purpose for the purchase of the property, the dominant purpose of which purchase was to invest in property and reap a capital apprecia�on. Take another case where a similar property was purchased for a similar purpose if the property merely contained one building which was let for a small rental, the con�nued leasing of this building could never be said to cons�tute ' the carrying on business ' even though the profit from the lease in the one case might be approximately the same as the 1963 - 1964 Z and NRLR p162 CHARLES J profit from the store in the other. Take yet another case, if the object of the purchase was to build a series of residen�al flats on the property and then turn the capital invested to account by the leasing of all these flats to different tenants, then as soon as the first of these flats was built and leased, the purchaser might be said to have commenced the ' carrying on of the business ' of leasing flats to the public. In these examples given, and in the vast majority of cases, there will be very litle difficulty in deciding whether par�cular ac�vi�es do or do not cons�tute ' carrying on business'. The occasional case will arise, however, where the decision will be an extremely difficult one to make; and unfortunately these are the cases that come before the courts." Looking at the appellant's financial ac�vi�es within the two assessment years with which these appeals are concerned, I am unable to see how, on the approach set out above, they can be regarded as having been even remotely a carrying on business. The receipt of rent of the three leasehold proper�es, as two, was the result of separate and unconnected transac�ons entered into for the purpose of using the proper�es pending their sale, and not for the purpose of carrying on a business of leasing real estate. It was suggested that the ren�ng of the industrial leaseholds to the A company was different because it was really a con�nua�on of an earlier lease by the gran�ng of a new one at a greatly increased rent which incorporated other payments made by the company to the appellant. It may be that the changed rent was unreal or fic��ous, but I cannot see how that fact could convert a single transac�on into a carrying on a business of le�ng, whatever else into which it may have converted the transac�on. As to the appellant's con�nued interest and ac�ve par�cipa�on in the business of the A company, both as a director and as the predominant shareholder, and his being a substan�al shareholder in the B company, during the two relevant assessment years, that clearly was not a carrying on business. It is well setled law - so well setled as to be trite - that an incorporated company is a legal person dis�nct from its shareholders and its servants by and through whom it acts, be they servants, directors, other execu�ves, accountants or office boys, and that the business of such a company is carried on by it, and not by those men�oned as being in varying degrees interested as servants, even though director may be in such a predominant posi�on as a shareholder as to be able to control the company and fairly regard it as his own. (See, for example, Smith v Anderson, supraat pages 275 - 6 per James, LJ; Gramophone and Typewriter Ltd. v Stanley [1908 - 10] All ER Rep. 833 (CA); Tunstall v Steigmann [1962] 2 All ER 417 (CA); Estate G v Commissioner of Taxes, supra.) Actually, the respondent's case as to the appellant haying carried on business in Northern Rhodesia in the relevant years of assessment seems to be that the appellant's le�ng of his leasehold proper�es to the A company, and his posi�on as supervisory director, shareholder and drawer of dividends in the A company, and as a substan�al shareholder in the B company, together amounted to carrying on a business as a profit maker from companies. If that is so, the short answer is that something cannot be made out of nothing; and different kinds of ac�vi�es which, although intended to produce gain, do not as a kind amount to carrying 1963 - 1964 Z and NRLR p163 CHARLES J on business cannot be converted into a carrying on business merely by considering them collec�vely with regard to their common object of gain. As I have found that the appellant was neither ordinarily resident nor carrying on business in Northern Rhodesia at any �me in the assessment year 1962 - 1963, the second appeal which relates to that year must be allowed. As I have found that the appellant was ordinarily resident in Northern Rhodesia from the 1st April, 1961, to the 27th April, 1961, in the assessment year 1961 - 1962, the fate of the first appeal depends upon the result of a considera�on of the third of the ques�ons stated earlier. In my judgment the proviso to clause (a) of subsec�on (2) of sec�on 86 of the Income Tax Act, 1964, only operates in favour of a taxpayer who was not either ordinarily resident or carrying on business in the late Federa�on throughout the relevant year of assessment. The substan�ve part of clause (a) was intended to apply to all dividends received by or accrued to a company liable to supertax or to an individual during, that is, at any �me in, the year of assessment. The proviso exempts from that general provision companies and individuals who were neither ordinarily resident nor carrying on business in the late Federa�on without men�oning the �me in respect of which the exemp�ng condi�ons were to exist. Obviously, the legislature did not intend the exemp�on afforded by the proviso to apply only to companies or individuals who had never been either ordinarily resident or carrying on business in the late Federa�on but only to those who had not been in either posi�on during the relevant year of assessment. The proviso accordingly must be read by implying into it a�er the word " Federa�on " where first occurring the words " during the year of assessment ", as used in the same sense as in the substan�ve part of the clause. Confirma�on of that implica�on is to be found in proviso (1) of sub-clause (b) of the same sec�on, where the Legislature used express words to convey its inten�on that the exemp�on therein granted was to apply to persons who had not been ordinarily resident throughout the year of assessment. It follows that, as the appellant was ordinarily resident for a part of the assessment year 1961 - 1962 the first appeal must be dismissed. There will be orders as follows: (a) The first appeal (1964, P. A., No. 2) will be dismissed. (b) The second appeal (1964, P. A., No. 3) will be allowed, the appellant's assessment for the year of assessment 1962 - 1963 being amended by excluding from the supertax income for that year all dividends received by him from the A company (to be named specifically in the formal order). (c) Subject to hearing argument, each party will abide his own costs of the appeals.