Commercial Banking Co of Sydney Ltd v Commissioner of Taxation [1950] HCA 15

High Court of Australia Latham C.J. Dixon, McTiernan, Williams, Webb and Fullagar JJ. Commercial Banking Co of Sydney Ltd v Commissioner of Taxation [1950] HCA 15

ORDER Commercial Banking Co. of Sydney Ltd. v. Federal Commissioner of Taxation.—Appeal allowed with costs. Declare (1) that for the purpose of s. 20 (2) of the Commonwealth Debt Conversion Act 1931, in its application to the ascertainment of ordinary tax and of further tax, no deduction should be made from the amount of interest to which s. 20 applies; (2) that for the purpose of ascertaining the rebate under s. 160AB of the Income Tax Assessment Act 1936-1944 upon the amount of interest to which s. 160AB applies derived by the taxpayer during the year of income the whole of the interest is to be taken to be included in its taxable income. Assessment remitted to the commissioner for amendment in accordance with these declarations. Federal Commissioner of Taxation v. Commercial Banking Co. of Sydney Ltd. —Appeal dismissed with costs.

Cur. adv. vult.

The following written judgments were delivered:—

June 8 Latham C.J.

These are two appeals from decisions of a Board of Review upon assessments to income tax under the Income Tax Assessment Act 1936-1944 of the Commercial Banking Co. of Sydney Ltd. in respect of the income year ended on 30th June 1944. I propose to deal, in the first place, with the appeal by the commissioner.

1. The Commonwealth Debt Conversion Act 1931 provided for the conversion of certain existing securities issued by the Commonwealth into "new securities."Section 20, in terms which require close examination, provided that the interest derived from such securities should be free from any future increases of income tax, and s. 3 of the Income Tax Assessment Act 1936-1944 provides that nothing in that Act shall affect the operation of the said Commonwealth Debt Conversion Act 1931.