Deputy Federal Commissioner of Taxation v Trustees of the Wheat Pool of Western Australia [1932] HCA 15

a

48 C.L.R.] OF AUSTRALIA.

(HIGH COURT OF AUSTRALIA.)

THE DEPUTY FEDERAL COMMISSIONER OF TAXATION ResponpveNt,

} APPELLANT ;

AND

THE TRUSTEES OF THE WHEAT POOL OF WESTERN AUSTRALIA ; APPELLANTS,

} RESPONDENTS.

ON APPEAL FROM THE SUPREME COURT OF WESTERN AUSTRALIA,

Income Tax (Cth.)—Assessment—Wheat pool—Reserve fund—Surplus in hands of H.C. or A. trustees paid into reserve fund—Whether amounts paid in are taxable—Income 1932.

Tax Assessment Act 1922-1928 (No. 37 of 1922—No. 46 of 1928), sec. 31. Nee MeLBoursg, 'Under the terms upon which the Wheat Pool of Westem Australia was

constituted the trustees of the Pool distributed the proceeds of the sale of the wheat as provided by the conditions of the Pool, and in accordance with such conditions paid the surplus remaining in their hands in each year into a reserve

fund. The Federal Commissioner of Taxation sought to tax the surplus so Gavan Duffy C.J, Rich,

Sypyey, May 12.

paid in under see, 31 (2) (b) of the Income Tax Assessment Act 1922-1928, as gc} Meh, income derived from personal exertion. Evatt and MeTiernan JJ.

Held, by Gavan Duffy C.J., Starke and Evatt JJ. (Rich, Dizon and McTiernan JJ. dissenting), (1) that the trustees of the Wheat Pool were not trustees within the meaning of the Income Tax Assessment Act, and, inasmuch as the growers were not, under the conditions of the Pool, nor were any other persons, presently or contingently entitled to the moneys placed to the credit of the reserve fund, the trustees were not liable to tax under sec. 31 of that Act ; (2) that the trustees were mandataries or agents of the growers and were assessable only to the extent that the growers were liable ; that in the amounts received by the trustees no account was taken of the cost of production of

Deputy FEDERAL Commis- SIONER OF TAXATION

v TRUSTEES OF THE Wnuear Poot or WESTERN AUSTRALIA.