Malayan Shipping Company Limited v Federal Commissioner of Taxation [1946] HCA 7

H. C. or A,

1946. w

Muvpourye,

March 20, 21.

Sypyry, April 9.

Williams J,

HIGH COURT (1946.

(HIGH COURT OF AUSTRALIA.]

MALAYAN SHIPPING COMPANY LIMITED . AppELianr ;

AND FEDERAL COMMISSIONER OF TAXATION . RzesponpEnt.

Income Tax (Cth.)—Liability to taxation—" Resident" —Company not incorporated in Australia—Business, where carried on—Central management and control— Voting power of shareholders—Main shareholder resident in Australia—Company managed and controlled by him—Company's contracts negotiated by him—Income Tax Assessment Act 1936-1942 (No. 27 of 1936—No. 50 of 1942), ss. 6, 25.

A company was incorporated in Singapore upon the instructions of S., who carried on business in Melbourne. The registered office of the company was in Singapore. 2,500 shares were paid for and issued to 8. Only two other shares were issued ; these were paid for by S. but were issued as qualification shares to two nominees in Singapore whom S. appointed directors of the company and who declared that they held the shares in trust for S. and executed, and gave him, blank transfers of the shares. By the articles of association S. was appointed managing director of the company and was empowered {o appoint and remove the other directors, The articles also provided that any resolution of the directors would be of no effect unless S. concurred therein and that the seal of the company should not be affixed to any instrument except by the authority of 8. The only business done by the company in the relevant period was to charter a ship and sub-charter it to S, on a number of voyage charters. The charter of the ship by the company was effected in London by a charter party signed on the company's behalf by shipping agents there upon cabled instructions from S. As to the voyage charters, S. prepared and executed