Commissioner of Taxation v. Smith, P.L. [1986] FCA 342

CATCHWORDS

INCOME TAX - Assessability to tax of bonus given to taxpayer by employer as reward for examination success - Payment made pursuant to "encouragement to study" policy of employer - Policy defined in staff rules and providing for payment of specified amounts to employees complet ing portions of approved courses - Whether payment constituted "income" of taxpayer - Whether payment received "in relation directly or indirectly to"

taxpayer's employment.

Income Tax Assessment Act 1936 ss.25, 26(e)

Federal Commissioner of Taxation v Dixon (1952) 86 CLR 540 applied.

Reseck v_ Commissioner of Taxation (1975) 133 CLR 45, Hayes v Federal Commissioner of Taxation (1956) 96 CLR 47, Scott v Commissioner of Taxation (1966) 117 CLR 514, Murdoch v Commissioner of Pay-ROll Tax (Victoria) (1980) 143 CLR 629, Moorhouse v Declan T1955) 1 Ch. 284, Laidler v Perry [1966] AC

16, The Queen v_ Savage (1983) 83 DTC 5409 referred to.

NSW G.375 of 1985 THE COMMISSIONER OF TAXATION OF THE COMMONWEALTH OF AUSTRALIA v

PETER LINDSAY SMITH

Sheppard, Neaves and Wilcox JJ Sydney ; 7 August 1986

IN THE FEDERAL COURT OF AUSTRALIA ) )

NEW SOUTH WALES DISTRICT REGISTRY ) No. G.375 of 1985 ) )

GENERAL DIVISION

ON APPEAL FROM THE SUPREME COURT OF NEW SOUTH WALES

BETWEEN: THE COMMISSIONER OF TAXATION

OF THE COMMONWEALTH OF AUSTRALIA

Appellant

AND: PETER LINDSAY SMITH

Respondent CORAM: SHEPPARD, NEAVES and WILCOX JJ PLACE: SYDNEY DATE: 7 AUGUST 1986

MINUTES OF ORDER

THE COURT ORDERS THAT:

1. The appeal be allowed.

2. The order of the Supreme Court of New South Wales be se

aside and in lieu thereof it be ordered that the appeal

to that Court be dismissed with costs.

The respondent pay to the appellant his costs of the

appeal.

Note: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.

TN THE FEDERAL COURT OF AUSTRALIA NEW SOUTH WALES DISTRICT REGISTRY o