Commissioner of Taxation v Star City Pty Limited (No 2) [2009] FCAFC 122

FEDERAL COURT OF AUSTRALIA

Commissioner of Taxation v Star City Pty Limited (No 2) [2009] FCAFC 122

TAXATION – Income tax – Administrative penalty – Tax return claimed prepayment of rent as revenue deduction – Amended assessment disallowing deduction – Prepayment held to be on capital account – Whether, in treatment prepayment as revenue, taxpayer had sole or dominant subjective purpose of paying less tax – Income Tax Assessment Act 1936 (Cth), s 226L. TAXATION – Income tax – Administrative penalty – Tax return claimed prepayment of rent as revenue deduction – Amended assessment disallowing deduction – Prepayment held to be on capital account – Whether taxpayer's tax liability would, apart from provision of taxation law or action taken under such a provision, have been less than it would have been in absence of treatment of prepayment as revenue – Whether treatment of prepayment as revenue in fact affected taxpayer's tax liability – Whether there was a taxation law which affected tax liability – Whether there was action taken under such a law – Whether amended assessment amounted to such action – Taxation Administration Act 1953 (Cth), Sch 1, s 284-145. A New Tax System (Tax Administration) Act 1999 (Cth) Income Tax Assessment Act 1936 (Cth): ss 51(1), 82KZM, 177D(b), 224, 226L, Income Tax Assessment Act 1977 (Cth): s 8‑1 Pt IVA Taxation Administration Act 1953 (Cth): Sch 1, ss 284‑145(1), 284‑150(1) A New Tax System (Tax Administration) Bill (No 2) 2000(Cth) Revised Explanatory Memorandum A New Tax System (Tax Administration) Bill 1999(Cth) Explanatory Memorandum Taxation Laws Amendment (Self Assessment) Bill 1992(Cth) Explanatory Memorandum Taxation Laws Amendment Bill 1984(Cth) Explanatory Memorandum Batagol v Federal Commissioner of Taxation (1963) 109 CLR 243 Bluebottle UK Ltd v Deputy Commissioner of Taxation (2007) 232 CLR 598 Clyne v Deputy Commissioner of Taxation (1981) 150 CLR 1 Commissioner of Taxation v Hart (2004) 217 CLR 216 Federal Commissioner of Taxation v Spotless Services Ltd (1996) 186 CLR 404 Federal Commissioner of Taxation v Starr (2007) 164 FCR 436, [2007] FCAFC 204 Krampel Newman Partners Pty Ltd v Commissioner of Taxation (No 2) (2003) 126 FCR 561 Lawrence v Commissioner of Taxation [2008] FCA 1497 COMMISSIONER OF TAXATION v STAR CITY PTY LIMITED (ABN 25 060 510 410)