Federal Commissioner of Taxation v Belford

88 CLR 589

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(Judgment by: Kitto J)

Between: Federal Commissioner of Taxation
And: Belford

Court:

Judges: Dixon CJ
Webb J
Fullagar J

Kitto JTaylor J

Subject References:
Taxation and revenue
Income tax
Assessable income
Income under trusts of will
Deseased estate and trustees ex-Australia
Liability to tax of taxpayer resident in Australia

Legislative References:
Income Tax Assessment Act 1936 No 27 - s 6; s 23(e); s 23(r); s 25(l); s 26(b); s 95; s 96; s 97; s 98; s 99; s 100; S101

Hearing date: 21 November 1952; 24 November 1952
Judgment date: 19 December 1952

SYDNEY

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Judgment by:
Kitto J

I agree that the question should be answered as proposed by the Chief Justice.

If, as the respondent contends, s. 95 of the Income Tax Assessment Act 1936-1945 should be so construed that, having regard to the non-residence of the trustees and the ex-Australian source of the trust income, s. 97 does not operate in respect of the income year ended 30th June 1945 to include any of the trust income in the respondent's assessable income, I should be of opinion that the income which the trustees paid to her in that year was included in her assessable income by force of s. 25 (1) (a) and s. 26 (b).

There is no purpose to be served by my publishing detailed reasons for this view, since the Court is prepared to place upon s. 95 the construction which the Chief Justice has indicated. I do not doubt that the sections for which s. 95 defines "the net income of the trust estate", construed as the Court construes them, fit into the scheme of the Act with a minimum of damage to its language, and so as to produce a degree of harmony which the draftsman may well wish he had intended.

I do not dissent from the view which appears to my brethren to be right, but I confess that I have not been free from an uneasy feeling that the line which divides construction from reconstruction is not far off.