In fact no dividend, as that word is ordinarily understood, was declared by Stewart Bacon. The appellant was never entitled to receive in cash his proportion of the capitalized profits. Nevertheless, the effect of the special resolution was that capitalized profits to the extent of $191,000 were credited to the appellant and applied on his behalf in paying up the shares: James v. Federal Commissioner of Taxation [8] ; Commissioner of Taxes (Vict.) v. Nicholas [9] ; Nicholas v. Commissioner of Taxes (Vict.) [10] . In a sense, therefore, it may be said that the shares cost the appellant $191,000 and that it was appropriate to treat their acquisition as a purchase for that amount. However, I do not need to base my decision on that ground. In my opinion it was not possible to arrive at the appellant's true income without taking the bonus shares into account as trading stock acquired, whether or not those shares could properly be regarded as having been purchased. The appellant's trading account would not reveal the real situation if it brought in at no value shares which were in fact valuable, because the amount which it would then show as income would include the value which the shares possessed when they were first brought into stock. The case may be compared with that of a trader who takes into his trading stock articles which he received by way of gift or under a bequest. Cases of that kind not falling within s. 36 of the Act may be rare, but they can be envisaged. In such a case an account will not reveal the true result of the trading unless those articles are brought in at an appropriate value, e.g., market selling value. If the account showed that the articles cost nothing, the result would be to increase the amount of the trader's profit or decrease the amount of his loss by the value of the gift or bequest and in effect to make the trader pay income tax on the gift or bequest. The only practicable way of reaching a true result in a case of that kind would be to bring the articles into the account at an appropriate value as though they had been purchased, and there is no provision in the Act that would require any different approach. To arrive at a true estimate of the appellant's income it seems to me necessary to bring the shares into the trading account at an appropriate value, which in the circumstances of the case must be their par value. However, it may be said that if this were done it would ignore the fact that the shares came to the appellant as the result of a bonus issue made by a company whose shares formed part of the appellant's trading stock and that in fact the transactions proved to be profitable. It must, however, be remembered that the transactions had two distinct aspects - first the acquisition of the shares and then the act of treating them as part of the trading stock and selling them. That which made the transactions profitable was the receipt of the shares as a bonus. If it were not for s. 44(2)(b)(iii), it would have been necessary to show the value of those shares on the income side of the trading account when they were allotted. It is true that it was held in Gibb v. Federal Commissioner of Taxation [11] that the value of bonus shares issued to a taxpayer does not constitute income in the ordinary sense, but that case was not dealing with the position of a person who traded in shares; if there were no such provision as s. 44(2)(b)(iii) the account of a share trader who received bonus shares in the circumstances of the present case would be misleading if it did not reflect in the account the benefit received. Thereafter the shares, at their par value, would have had to be included in the account together with the purchases, to enable the necessary comparison to be made between stock held at the beginning of the period together with stock acquired, on the one hand, and stock held at the end of the period together with proceeds of sales, on the other. The ultimate result of accounts prepared in this way would have been to show that a profit of $2,782.64 resulted from the transactions relating to the Stewart Bacon shares considered as a whole. However, s. 44(2)(b)(iii) has the effect that the value of the bonus shares cannot be included in the assessable income - it is that circumstance that leads to a result which appears to be distorted. That, however, is no reason for falsely showing the shares to have had no value when brought into the account as trading stock, and an account prepared on such a false basis would lead indirectly to the taxation of the "dividend" which s. 44(2)(b)(iii) declares shall not be included in the assessable income.