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Till 12th July, 1940, a shipping agents firm had Dixon as an employee. He worked there as a clerk. In 1939, a notification had been shared with the employees that in case any staff members are recruited in the army, the firm will undertake making up the payment that they receive in military to the identical level as would their civilian payment would be. On 12th July 1940, Dixon got himself enlisted voluntarily in the army of Australia. As per the notification that was issued to the employees previously, the firm of shipping agents, his former employer, brought up the payment to be made to him to its previous level. In 1945, Dixon got a discharge from the army. He made a return to his previous employment with the firm of shipping agents, even though there was no commitment on either side for him to do this. The question that was required to be given decision on was if the extra payment that was given to Dixon by his previous employers should be taken as gross income (Gupta, 2009).
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