Federal Commissioner of Taxation v. Dalco

Judges: Mason CJ
Brennan J

Deane J
Dawson J
Toohey J
Gaudron J
McHugh J

Court:
Full High Court

Judgment date: Judgment handed down 9 February 1990.

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Deane J.

I am in general agreement with the judgments of Brennan J. and Toohey J. I add some comments for myself.

In the circumstances of the present case, the respondent taxpayer discharged the onus imposed upon him by the Income Tax Assessment Act 1936 (Cth) (in particular, sec. 190(b)) only if he proved, on the balance of probabilities, that his actual assessable income during the period to which a particular assessment related was less than the amount included as assessable income in that assessment. The learned trial Judge ( Yeldham J.) found that the respondent had failed to prove that that was so in respect of any of the challenged assessments. In this Court, the respondent has not challenged his Honour's finding in that regard.

In a case where the only issue between a taxpayer and the Commissioner is whether a particular item of income which the Commissioner has treated as assessable income of the taxpayer was derived by the taxpayer or by someone else, the onus which the Act imposes upon the taxpayer establishes, on the balance of probabilities, that the relevant income was derived by the other person. The present is not, however, such a case. Even if it be accepted that the respondent succeeded in proving that particular items of income were primarily derived by one or other of the companies associated with him, there remained in issue the question whether some or all of the relevant amounts had been subsequently derived by the respondent as payments in the nature of income made to him or on his behalf by that company. There also remained in issue the question whether the respondent had derived other undisclosed income. The respondent's failure to discharge the onus which the Act placed upon him in respect of those remaining issues had the consequence that he failed to establish that the Commissioner's assessments of his assesable income were excessive.

It follows that the appeals must be allowed and the orders of Yeldham J. restored.