95
been furnished as regards Item F., that these items may be wholly excluded from the revenue assessable to military contribution, as being in the nature of reimbursements of special expenditure or accounting adjustments.
House Service Account.
E.
6.
t
The Council agree that the revenue from this source should be excluded from assessment, subject, in view of the further information contained in your letter Her 92756/3161 29th March, 1932,to the proviso that if at any time a profit is made on this Account, the profit should be included in the assessable revenue, In order that the point should not be overlooked, it is considered that the items should be treated in the annual statement of assessable revenue on the basis of net receipts.
G.
Waterworks.
7. The Council are unable to support the suggestion, based on a distinction of geographical location, that the waterworks in the New Territories can be regarded as a "new productive undertaking" entirely distinct from the waterworks existing in Hong Kong Island and Kowloon prior to 1896, and so qualified for consideration for treatment on the basis of net receipts. It appears to be clear from the terms of all the past correspondence on the treatment of productive undertakings that the term "new productive undertaking" is intended to mean a productive undertaking of a character or kind which did not exist in a Colony and contribute to the Revenue when the contribution was fixed on a percentage of revenue basis, e.g., railways in the Straits Settlements and Hong Kong, telephones, tramways, etc. treatment of the revenue of an extension of any undertaking
The question of the whose assessment to contribution has always been treated on the basis of gross receipts, e.g., Post Offices, has, treatment of increases of other sources of revenue, never been like the in dispute. This is natural in view of the principle that
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82756/21 [NO. 24]
3
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