Commissioner of Taxation v Northern Timber & Hardware Co Pty Ltd [1960] HCA 93

High Court of Australia Fullagar, Kitto and Menzies JJ. Commissioner of Taxation v Northern Timber & Hardware Co Pty Ltd [1960] HCA 93

ORDER Question in the case stated answered No. The respondent taxpayer to pay the Commissioner's costs of the case stated.

Cur. adv. vult.

The Court delivered the following written judgment:—

Dec. 16 Fullagar, Kitto and Menzies JJ.

The case, which Fullagar J. has stated pursuant to s. 18 of the Judiciary Act 1903-1960 upon an appeal by the Commissioner from a majority decision of the Board of Review No. 2, raises the question whether a provision of £436, being part of a larger provision of £586 19s. 11d. made by the respondent taxpayer in its books of account during the year ended 30th June 1955 to meet its prospective liabilities in respect of long service leave to be granted to workers under Div. 4 of Pt. VIII of the Labour and Industry Act 1953 Vict., is deductible in the assessment of its taxable income for the year ended 30th June 1955. If this amount is deductible, it must be by virtue of s. 66 of the Income Tax and Social Services Contribution Assessment Act 1936-1955. The deduction claimed cannot be justified under s. 51 of the Act (Federal Commissioner of Taxation v. James Flood Pty. Ltd. [1] , but at the hearing and notwithstanding the form of the questions asked in the case stated, it was sought to rely upon s. 51 to justify the deduction of an amount which could be regarded as having become payable to one employee of the taxpayer who in the tax year with which we are concerned had become entitled to three months long service leave. As to this, it is only necessary to say, as was pointed out in the course of the argument, that because the taxpayer's notice of objection plainly relates to the provision made in its books to meet future liabilities and not to an actual liability for a sum less than this provision, this ground was by reason of s. 190 (a) of the Act not open to the appellant; and no more need be said about it now.