Commissioner of Taxation of the Commonwealth of Australia v. Rowe, Anthony John Poulston [1995] FCA 834

CATCHWORDS

INCOME TAX - assessable income - claim by taxpayer for legal expenses incurred in connection with Inquiry into his suspension from employment with local government authority - whether legal expenses allowable deduction - true nature of Inquiry - ex gratia payment from State Government covering taxpayer's legal expenses - whether gratuitous payment assessable income in accordance with general concepts or benefit under s.26(e)

Income Tax Assessment Act 1936 ss25(1), 26(e), 51(1) Local Government Act 1936-1985 (Q'ld) s4A "Assessable income under s25(1)" Cases considered: TNT Skypak International (Aust) Pty Ltd v Federal Commissioner of Taxation (1988) 82 ALR 175 Federal Commissioner of Taxation v Harris (1980) 43 FLR 36 First Provincial Building Society Limited v Federal Commissioner of Taxation (1995) 95 ATC 4,145 International Nickel Australia Limited v Commissioner of Taxation (1977) 137 CLR 347 "Deductibility of legal and other expenses" Cases considered Inglis v Federal Commissioner of Taxation (1987) 87 ATC 2,037 Hallstroms Pty Ltd v Federal Commissioner of Taxation (1946) 72 CLR 634 Dobbs v Commissioner of Inland Revenue 74 ATC 6,001 Federal Commissioner of Taxation v Maddalena (1971) 71 ATC 4,161 Kemp v Federal Commissioner of Taxation (1992) 92 ATC 4,542 Commissioner of Taxation v Raymor (NSW) Pty Ltd (1990) 24 FCR 90 Sun Newspapers Limited v Federal Commissioner of Taxation (1938) 61 CLR 337 Case distinguished Kratzmann v Federal Commissioner of Taxation (1970) 1 ATR 827 "Assessability of payment under s.26(e)" Cases considered The Squatting Investment Co Ltd v Federal Commissioner of Taxation (1953) 86 CLR 570 Hochstrasser v Mayes [1960] AC 376 Federal Commissioner of Taxation v Dixon (1952) 86 CLR 540 H.R. Sinclair & Son Pty Ltd v Commissioner of Taxation (1966) 114 CLR 537 Smith v Commissioner of Taxation (1987) 164 CLR 513 Haggarty v Federal Commissioner of Taxation (1989) 89 ATC 4,485