Douglass v Federal Commissioner of Taxation
45 CLR 95(Judgment by: McTiernan J)
Between: Douglass
And: Federal Commissioner of Taxation
Judges:
Rich J
Starke J
Dixon J
Evatt J
McTiernan J
Subject References:
TAXATION AND REVENUE
INCOME TAX
DEDUCTIONS
Tax paid on profits
Shareholder entitled to rebate
Legislative References:
Income Tax Assessment Act 1922 (Cth) - s 16(b)(i); s 16(b)(iii); s 23
Judgment date: 11 May 1931
Melbourne (heard in Sydney)
Judgment by:
McTiernan J
I agree that the appellant is entitled to a rebate of 1s. in the PD1 on the sum of PD11,830. The Income Tax Assessment Act 1922-1927 does not, in my opinion, expressly or impliedly authorize that the rebate mentioned in the last proviso to s. 16 (b) should be calculated in the manner which has been adopted by the respondent, and I do not think that this method of calculation has been made implicit in the section by the use of the words "that part." The only clear intention of the Legislature, which the proviso exhibits, is that a taxpayer who comes within its provisions should be entitled to have a deduction made from the amount of taxation for which he is liable to be assessed. The reason for the rebate appears to be that the income of such a taxpayer has been retrenched by the payment of income tax by the company in which he is a shareholder, and his own "assessable income" has been made to include a sum of dividends, bonuses and profits, which have been taken into account in computing the "assessable income" of the company. (s. 16 (a), (b).)
However, while the intention of the Legislature to grant a rebate is clearly expressed, it does not appear to have provided that the two deductions in question in the present case, should be apportioned in any manner between the appellant's income consisting of dividends and his other income, for the purpose of arriving at the rebate. In the absence of clearer legislative provision governing the calculation of the rebate in the present case, I agree with my brother Starke, that the words of the proviso to s. 16 (b) will be satisfied by allowing a rebate at the rate of 1s. in the PD1 on the sum of PD11,830. That amount is the whole amount of the dividends included in his assessment upon which tax has been paid at the rate of 1s. in the PD1 by certain companies in which the appellant was a shareholder.