White v Commissioner of Taxation (Cth) [1968] HCA 41

High Court of Australia Windeyer J. Barwick C.J. Taylor and Owen JJ. White v Commissioner of Taxation (Cth) [1968] HCA 41

ORDER Appeal dismissed with costs.

Cur. adv. vult.

June 25 Windeyer J.

This is an appeal by Mr. Ernest Keith White, whom I shall call the taxpayer, against the decision of the Commissioner of Taxation disallowing his objection to the Commissioner's assessment of income tax in respect of the year ended 30th June 1966. Evidence and argument finished last week and I have since the adjournment considered the matter. The case was restored to the list today as I wished to hear any submission either party might wish to make about the effect of s. 124J of the Income Tax Assessment Act 1936-1966 Cth, which had not been mentioned earlier. This matter having been discussed, I can now give judgment. I shall do so orally.

The question turns upon the inclusion by the Commissioner of a sum of $5,000 in the assessable income of the taxpayer. This sum was on 20th June 1966 credited to the taxpayer's account in the books of a company, R. J. White & Company (Sydney) Pty. Limited, in respect of timber disposed of by the taxpayer to the company. The taxpayer claims this sum was not part of his assessable income. Alternatively he said that, if it is assessable income, he is entitled to a deduction calculated by reference either to the cost to him of the acquisition of the timber or to its value at the date when it was taken by the company.

The taxpayer has for many years past been engaged in the business of a timber merchant. He has so described himself and has been so described in legal documents. As a description of the nature of his occupation, the term is entirely apt, although since 1926 he has carried on business mainly by the medium of the company, R. J. White & Company (Sydney) Pty. Limited, a private company formed by him, which, as I shall explain later, was and is entirely under his control, the beneficial interest in which belongs—substantially at all events—to him.