Puzey v Commissioner of Taxation [2004] FCAFC 23

FEDERAL COURT OF AUSTRALIA

Puzey v Commissioner of Taxation [2004] FCAFC 23 INCOME TAX – supplementary orders – whether taxpayer entitled to deductions claimed for participation in an Indian Sandalwood plantation – plantation management fee – whether on capital account Income Tax Assessment Act 1997 (Cth) s 8-1

Puzey v Commissioner of Taxation (2002) 194 ALR 615 cited Puzey v Federal Commissioner of Taxation (2003) 201 ALR 302 cited NOEL PUZEY V COMMISSIONER OF TAXATION OF THE COMMONWEALTH OF AUSTRALIA W 30 of 2003 W 31 of 2003

FRENCH, HILL & CARR JJ 13 FEBRUARY 2004 PERTH

IN THE FEDERAL COURT OF AUSTRALIA

WESTERN AUSTRALIA DISTRICT REGISTRY W30 OF 2003

ON APPEAL FROM A SINGLE JUDGE OF THE FEDERAL COURT OF AUSTRALIA

BETWEEN: NOEL PUZEY

APPELLANT

AND: COMMISSIONER OF TAXATION OF THE COMMONWEALTH OF AUSTRALIA

RESPONDENT

JUDGES: FRENCH, HILL & CARR JJ

DATE OF ORDER: 13 FEBRUARY 2004

WHERE MADE: PERTH

THE COURT ORDERS THAT:

The Orders made on 26 August 2003 are confirmed. Note: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules

IN THE FEDERAL COURT OF AUSTRALIA

WESTERN AUSTRALIA DISTRICT REGISTRY W30 OF 2003

W31 OF 2003

ON APPEAL FROM A SINGLE JUDGE OF THE FEDERAL COURT OF AUSTRALIA

BETWEEN: NOEL PUZEY

APPELLANT

AND: COMMISSIONER OF TAXATION OF THE COMMONWEALTH OF AUSTRALIA

RESPONDENT

JUDGES: FRENCH, HILL AND CARR JJ

DATE: 13 FEBRUARY 2004

PLACE: PERTH

REASONS FOR JUDGMENT ON SUPPLEMENTARY SUBMISSIONS THE COURT: 1 The present appeal was brought against a judgment of Lee J dismissing an appeal by Mr Noel Puzey against the disallowance of objections to assessments of his income tax for the years ended 30 June 1997 and 30 June 1998 – Puzey v Commissioner of Taxation (2002) 194 ALR 615. The case concerned deductions claimed by Mr Puzey in respect of his investment in a project for the planting and development of an Indian Sandalwood plantation. 2 Relevantly for present purposes Lee J made the following orders at first instance on 24 December 2002: '1. Save for Item 2 hereof, the appeal be dismissed. 2. The "appealable objection decision" in respect of the 1998 year of income be set aside and the matter be remitted to the Commissioner with the direction that the applicant's objection to the amended assessment of income tax be allowed to the extent that deductions from taxable income are allowed for plantation establishment fees ($2,000), and for plantation management fees ($800). 3. The applicant pay one-half of the Commissioner's costs of the appeal.' 3 On 26 August 2003, in Appeal W30 of 2003, the Full Court, on appeal from Lee J, made the following orders: 1. Paragraph 2 of the orders made on 24 December 2002 be varied by deleting the words '…the deductions from taxable income are allowed for plantation establishment fees ($2,000), and for plantation management fees ($800)' and inserting in lieu thereof the words 'the deduction from taxable income is allowed for plantation management fees ($800)'. 2. Paragraph 3 of the orders made on 24 December 2002 be set aside and in lieu thereof there be an order that the appellant pay the respondent's costs of the proceedings at first instance.