Commissioner of Taxation v Firth [2002] FCAFC 95 ; [2002] FCA 413

Commissioner of Taxation v Firth [2002] FCAFC 95 Commissioner of Taxation v Firth [2002] FCA 413

NOTE: CHANGES TO THE MEDIUM NEUTRAL CITATION (MNC) The Federal Court adopted a new medium neutral citation (FCAFC) for Full Court judgments effective from 1 January 2002. Single Judge judgments will not be affected and will retain the FCA medium neutral citation. The transitional arrangements are as follows: * All Full Court judgments delivered prior to 1 January 2002 will retain the FCA medium neutral citation. * All Full Court judgments delivered between 1 January 2002 to 30 April 2002 have been assigned parallel medium neutral citations in both the FCA and FCAFC series. * All Full Court judgments delivered from 1 May 2002 will contain the FCAFC medium neutral citation only.

FEDERAL COURT OF AUSTRALIA

Commissioner of Taxation v Firth [2002] FCA 413

INCOME TAX – deduction claimed by taxpayer who carried on short term investment business for interest on secured loan used to purchase shares where loan made on terms that the lender had no personal right to sue the borrower but only recourse to the security – whether interest in part consideration for non recourse agreement and this in part non deductible. Income Tax Assessment Act 1997 (Cth) s 8-1(1), (2) Income Tax Assessment Act 1936 (Cth) s 51(1) Taxation Administration Act 1953 (Cth), ss 14ZZ(c), 14ZZN, 14ZZO, 14ZZP

Federal Commissioner of Taxation v Riverside Road Pty Ltd (1990) 23 FCR 305 discussed Federal Commissioner of Taxation v Broken Hill Co Pty Ltd (2000) 179 ALR 593 applied Federal Commissioner of Taxation v Hatchett (1971) 125 CLR 494 referred to Ronpibon Tin NL v Federal Commissioner of Taxation (1949) 78 CLR 47 discussed Federal Commissioner of Taxation v Smith (1981) 147 CLR 578 cited Lunney v Federal Commissioner of Taxation (1958) 100 CLR 478 cited Colonial Mutual Life Assurance Society Ltd v Federal Commissioner of Taxation (1953) 89 CLR 428 at 454 cited Hallstroms Pty Ltd v Federal Commissioner of Taxation (1946) 72 CLR 634 discussed Fletcher v Commissioner of Taxation (1991) 173 CLR 1 cited Ure v Federal Commissioner of Taxation (1981) 34 ALR 237 discussed Federal Commissioner of Taxation v BHP Co Ltd (2000) 179 ALR 593 referred to Re Farm Security Act 1944 of the Province of Saskatchewan [1947] SCR 394 cited Federal Commissioner of Taxation v Munro (1926) 38 CLR 153 cited Federal Commissioner of Taxation v Ilbery (1981) 58 FLR 191 cited Federal Commissioner of Taxation v South Australian Battery Makers Pty Ltd (1978) 140 CLR 645 applied Brick and Pipe Industries Ltd v Occidental Life Nominees Pty Ltd [1992] 2 VR 279 cited Steele v Deputy Commissioner of Taxation (1999) 197 CLR 459 cited Sun Newspapers Ltd v Federal Commissioner of Taxation (1938) 61 CLR 337 referred to GP International Pipecoaters Pty Ltd v Federal Commissioner of Taxation (1990) 170 CLR 124 cited Australian National Hotels Ltd v Federal Commissioner of Taxation (1989) 19 FCR 234 referred to BP Australia Ltd v Commissioner of Taxation (1965) 112 CLR 386 cited Commissioner of Taxation v Radilo Enterprises Pty Ltd (1997) 72 FCR 300 cited Mathew v Blackmore (1857) 1 H & N 762; 156 ER 1409 cited The King v New Queensland Copper Co Ltd (1917) 23 CLR 495 cited De Vigier v Inland Revenue Commissioners [1964] 1 WLR 1073 cited NZI Capital Corporation Pty Ltd v Child (1991) 23 NSWLR 481 cited R Parsons, Income Taxation in Australia (1985) COMMISSIONER OF TAXATION v FIRTH N 1386 OF 2001 HILL, SACKVILLE AND FINN JJ 17 APRIL 2002 SYDNEY