Federal Court of Australia
FEDERAL COURT OF AUSTRALIA
Lilyvale Hotel Pty Ltd v Commissioner of Taxation [2009] FCAFC 21
TAXATION – income tax – whether losses carried forward are deductible in later year of income – application of the 'same business test' – whether throughout the 'same business test period' the company carried on the same business as it carried on immediately before the test time – question of fact that is dependent on the characterisation of activities in which the appellant actually engaged – changes in the way in which a business was carried on do not necessarily render it a different business for the purpose of the 'same business test'. HELD – the losses carried forward were deductible in the later year of income. Income Tax Assessment Act 1997 (Cth) ss 165-10, 165-12, 165-13, Subdiv 165-D, s 165-210 Income Tax Assessment Act 1936 (Cth) ss 80A, 80E Avondale Motors (Parts) Pty Ltd v Federal Commissioner of Taxation (1971) 124 CLR 97 applied International Harvester Co of Australia Pty Ltd v Carrigan's Hazeldene Pastoral Co (1958) 100 CLR 644considered J Hammond Investments Pty Ltd v Federal Commissioner of Taxation (1977) 31 FLR 349applied South Sydney District Rugby League Football Club Ltd v News Ltd (2000) 177 ALR 611 considered LILYVALE HOTEL PTY LIMITED v COMMISSIONER OF TAXATION
NSD 1193 of 2008
EDMONDS, GRAHAM AND PERRAM JJ
6 MARCH 2009
SYDNEY
IN THE FEDERAL COURT OF AUSTRALIA
NEW SOUTH WALES DISTRICT REGISTRY NSD 1193 of 2008
ON APPEAL FROM A SINGLE JUDGE OF THE FEDERAL COURT OF AUSTRALIA
BETWEEN: LILYVALE HOTEL PTY LIMITED
Appellant
AND: COMMISSIONER OF TAXATION
Respondent
JUDGES: EDMONDS, GRAHAM AND PERRAM JJ
DATE OF ORDER: 6 MARCH 2009
WHERE MADE: SYDNEY
THE COURT ORDERS THAT:
1. The appeal be allowed. 2. The orders made by the primary judge on 10 July 2008 be set aside. 3. The objection decision of the respondent of 30 May 2006 be set aside. 4. The deduction of $10,579,458 claimed by the appellant in respect of the 2003 income year be allowed in full. 5. The respondent pay the appellant's costs of the appeal. 6. The respondent pay the appellant's costs of the appeal against the disallowance of the appellant's objection dated 9 December 2005, at first instance. Note: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules. The text of entered orders can be located using eSearch on the Court's website. IN THE FEDERAL COURT OF AUSTRALIA
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