Denmark Community Windfarm Ltd v Commissioner of Taxation [2018] FCAFC 11

FEDERAL COURT OF AUSTRALIA

Denmark Community Windfarm Ltd v Commissioner of Taxation [2018] FCAFC 11 Appeal from: Denmark Community Windfarm Ltd v Commissioner of Taxation [2017] FCA 478

File number: WAD 239 of 2017

Judges: GILMOUR, JAGOT AND MOSHINSKY JJ

Date of judgment: 5 February 2018

Catchwords: TAXATION – income tax – assessable income – assessable recoupments – where the taxpayer received a grant from the Commonwealth to fund part of the cost of construction of wind turbines – where the taxpayer claimed depreciation deductions in relation to the relevant assets – whether the grant was a "recoupment" within the meaning of s 20-25 of the Income Tax Assessment Act 1997 (Cth) – whether the grant was an "assessable recoupment" within the meaning of s 20-20 – whether the taxpayer received the grant "by way of … indemnity" within the meaning of s 20-20(2) – whether the depreciation deductions were deductions "for the loss or outgoing" within the meaning of s 20-20(2) or 20-20(3)

Legislation: Income Tax Assessment Act 1936 (Cth), s 26 Income Tax Assessment Act 1997 (Cth), ss 6-5, 15-10, 20-20, 20-25, 20-30, 20-40, 40-15, 40-25, 40-70, 40-72, 40-75, 40-180, 40-190, 328-110, 328-170, 328-175 Taxation Administration Act 1953 (Cth), s 14ZZ

Cases cited: Batchelor v Federal Commissioner of Taxation (2014) 219 FCR 453 Commercial Banking Company of Sydney Ltd v Federal Commissioner of Taxation (1983) 70 FLR 433 Federal Commissioner of Taxation v Wade (1951) 84 CLR 105 Goldsbrough Mort & Co Ltd v Federal Commissioner of Taxation (1976) 14 SASR 591 Robert v Collier's Bulk Liquid Transport Pty Ltd [1959] VR 280 Williamson v Commissioner for Railways [1960] SR (NSW) 252