Texas Co (Australia) Ltd v Federal Commissioner of Taxation; Federal Commissioner of Taxation v Texas Co (Australia) Ltd
(1940) 63 CLR 38214 ALJ 32
Between: Texas Co (Australia) Ltd
And: Federal Commissioner of Taxation
Between: Federal Commissioner of Taxation
And: Texas Co (Australia) Ltd
Judges:
Latham CJ
Rich J
Starke J
Dixon J
McTiernan J
Subject References:
Income Tax (Cth)
Judgment date: 18 March 1940
ORDER
The order of the court was, as amended on 8th April 1940, as follows: - With respect to the questions set out in the order of Rich J. of 3rd November 1939 as amended order and declare as follows: -
As to Question 1. Declare that so much of the amount of the exchange referred to in the said question as is found to be referable to expenditure incurred in or for the purpose of discharging or providing for liabilities on revenue or income account ought to be allowed as a deduction in ascertaining (except under sec. 28 of the Income Tax Assessment Act) the taxable income of the company in the year in which payments as set forth in the mutual admissions were made.
As to Question 2. Declare that no part of the expenditure or outgoings incurred by the appellant company for the purpose of carrying on its business in New Zealand ought to be allowed in ascertaining the company's taxable income under the Income Tax Assessment Act and that in ascertaining the taxable income of the company for the income year 1930 none of the gross income derived by the company from carrying on its business in New Zealand should be included in its assessable income.
As to Question 3. Declare that the power of the board of review was not confined to upholding the objection of the appellant company to the assessments for the years of income 1929, 1930 and 1931.
As to Question 4. Declare that notwithstanding the decision of the board of review of 28th July 1937 the said board had power to give with respect to the years of income 1929, 1930 and 1931 its decision of 18th October 1937 and that with respect to the year of income 1933 the said board rightly refused to fix any percentage under sec. 28 and no assessment under the said section was warranted by the facts.
As to Question 5. Declare that the power of the board of review with respect to the year of income 1932 was not confined to setting aside the assessment.
As to Question 6. Declare that the assessments by the board of review for the years of income 1929, 1930, 1931 and 1932 are not void, but, subject to any order made by this court in these appeals, are binding upon the appellant company.
As to Question 7. Declare that no order should be made upon this reference to the Full Court.
As to Question 8. Declare that the fact that part of the business of the appellant company is carried on outside Australia is not a valid ground of objection to the application of sec. 28 of the Income Tax Assessment Act in assessing the company in respect of income tax.
As to Question 9. Declare that it is not a valid ground of objection to the application of sec. 28 of the Income Tax Assessment Act to year of income 1932 that in the years immediately preceding and following that year the taxable income of the appellant company has been ascertained on ordinary principles and not by the application of sec. 28.
As to Question 9A. Declare that the board of review rightly refused to fix any percentage under sec. 28 of the Income Tax Assessment Act for the year of income 1933 and the facts did not warrant the making of any assessment under that section.
As to Question 10. Declare that in ascertaining the taxable income of the appellant company upon which the tax imposed by sec. 5 of the Income Tax Act 1934 and by the corresponding previous taxing provisions is payable the deductions claimed by the appellant company for outgoings and expenditure in connection with petrol pumps are not allowable against interest derived by the appellant company but the receipts from pump rents ought not to be included in the gross income for the purpose of such ascertainment.
As to Question 11. Declare that notwithstanding the application of sec. 28 of the Income Tax Assessment Act to the assessment of the appellant company for ordinary income in respect of the year of income 1932 the appellant company remained liable to the further income tax payable under sec. 5 of the Income Tax Act 1933.
As to Question 12. Declare that for the year of income 1932 the amount of the taxable income upon which the further income tax payable under sec. 5 of the Income Tax Act 1933 is levied should be ascertained independently of sec. 28 and in the same manner as if sec. 28 had not been applied in respect of that year for the purpose of assessing the appellant company to ordinary income tax.
The costs of this reference to the Full Court, costs in the appeals.