Federal Commissioner of Taxation v Stone

The High Court of Australia heard an appeal by the Federal Commissioner of Taxation against Ms Joanna Stone, a champion javelin thrower. The dispute concerned whether various receipts derived by Ms Stone from her athletic activities, including prize money, government grants, appearance fees, and sponsorship payments, constituted assessable income for income tax purposes. A key question was whether these receipts were derived from the conduct of a "business" as a professional sportsperson.

The Court was required to determine the meaning of "income" under section 6-5(1) of the *Income Tax Assessment Act 1997* (Cth), which defines assessable income to include ordinary income. Specifically, the Court had to consider whether the taxpayer's athletic activities could be characterised as a "business" and, if so, whether receipts derived from such a business were automatically assessable income. The Court also considered the relevance of the broad definition of "business" provided in section 995-1(1) of the Act to the interpretation of "ordinary income" in section 6-5(1).

The Court allowed the Commissioner's appeal. It reasoned that the definition of "business" in section 995-1(1) of the *Income Tax Assessment Act 1997* was not intended to be incorporated into the description of "assessable income" and "ordinary income" as found in section 6-5(1). The Court found that the broad definition of "business" was irrelevant to the task of determining whether receipts constituted ordinary income. The Court ultimately set aside the orders of the Full Court of the Federal Court of Australia, dismissing the taxpayer's appeal to that Court. The taxpayer's cross-appeal was also dismissed.