Constable v Federal Commissioner of Taxation

The case of *Constable v Federal Commissioner of Taxation* concerned an appeal by Albert Ernest Constable against an assessment by the Commissioner of Taxation for the income year ended 30 June 1948. The dispute centred on whether certain amounts withdrawn by Constable from a provident fund constituted assessable income. The matter was stated for the opinion of the Full Court of the High Court of Australia.

The primary legal issue before the court was whether a sum of £316, representing employer contributions and interest, and a sum of £48, representing interest on the appellant's own contributions, withdrawn by Constable from the Provident Fund of the Combined Petroleum Companies, formed part of his assessable income for the relevant year. This question hinged on whether these payments were considered an "allowance, gratuity, compensation, benefit, bonus or pension" within the meaning of section 26(e) of the *Income Tax Assessment Act 1936-1947*.

The court reasoned that the payment received by Constable was due to a contingency that became absolute upon the alteration of the provident fund's regulations, which terminated the obligation for further contributions and the admission of new members. This event did not constitute an allowance, gratuity, compensation, benefit, bonus, or pension granted in respect of his employment. Therefore, no part of the withdrawn sum was deemed to be assessable income.

The appeal was allowed, and the assessment was to be reduced by excluding the sum of £1,750 from the appellant's assessable income for the year ended 30 June 1946.