DEVELOPMENT UNDERWRITING LIMITED V. THE COMMISSIONER OF TAXATION OF THE COMMONWEALTH OF AUSTRALIA

IN THE HIGH COURT OF AUSTRALIA

DEVELOPMENT UNDERWRITING LIMITED

THE COMMISSIONER OF TAXATION OF THS COMMONWEALTH OF AUSTRALIA

REASONS FOR JUDGMENT

Judgment delivered at....tornesr esseeeeeeeecsnneceeeeeeceeeceee Friday, 30th July 1971

on.

DEVELOPMENT UNDERWRITING LIMITED

Ve

THE COMMISSIONER OF TAXATION FOR THE COMMONWEALTH OF AUSTRALIA

ORDER

\ Appeal allowed with costs. Usual order as to

exhibits,

JUDGMENT

DEVELOPMENT UNDERWRITING LIMITED

ve

THE COMMISSIONER OF TAXATION FOR THE COMMONWEALTH OF AUSTRALIA

MENZIES J.

EVELOPMENT UNDERWRITING LIMITED

v.

THE COMMISSIONER OF TAXATION FOR THE COMMONWHALTH OF AUSTRALIA

By its appeal the appellant taxpayer set out to convince the Court that the sum of $100,000, received by it from the National Mutual Life Association of Australasia Limited during the year ended 30th June 1967, was not part of its assessable' income of that year.

The Commissioner included the receipt as part of the assessable income of the taxpayer on the footing that it was the proceeds of a policy of insurance effected upon an employee - one Ignaz Abeles - so that, upon his death on the 2nd October 1966, the company should receive the money to take the place of the benefits it would otherwise have derived from the continuance of his services as the managing director of Metro Shirts (Industries) Pty. Limited and its subsidiaries;

Commissioners of Inland Revenue v. William's Executors (1944)

26 Tax Cas. 23, and Carapark Holdings Limited v. The Commissioner

of Taxation for the Commonwealth of Australia (1965-66) 115

C.L.R. 653. The taxpayer contests this and contends that the court should find that the policy in question was taken out by the taxpayer so that it would be in a position, in the event of the death of Mr. Abeles, to pay to his estate large sums deposited with the taxpayer upon terms that they would be