Victoria Power Networks Pty Ltd v Commissioner of Taxation [2020] FCAFC 169

Federal Court of Australia

Victoria Power Networks Pty Ltd v Commissioner of Taxation [2020] FCAFC 169 Appeal from: Victoria Power Networks Pty Ltd v Commissioner of Taxation [2019] FCA 77

File numbers: VID 237 of 2019 VID 238 of 2019 VID 239 of 2019 VID 240 of 2019

Judgment of: LOGAN, COLVIN AND THAWLEY JJ

Date of judgment: 21 October 2020

Catchwords: TAXATION – assessable income – income according to ordinary concepts – non-cash business benefits – where electricity distributors were required to connect customers to the electricity network upon request – where the connection works were carried out either by the distributor or by the customer – where, in relation to the first situation, if the connection was "uneconomic", the customer paid a cash contribution to the distributor – whether the cash contribution was income according to ordinary concepts – where, in relation to the second situation, the customer was required to transfer the relevant assets to the distributor and received a rebate from the distributor – where, in relation to that situation, if the connection was "uneconomic", the rebate was the estimated cost of construction less a customer contribution – whether the customer contribution was income according to ordinary concepts – whether the transferred assets constituted a non-cash business benefit – consideration of the amount to be included in the distributor's assessable income pursuant to s 21A of the Income Tax Assessment Act 1936 (Cth) – consideration of the arm's length value of the transferred assets

Legislation: Income Tax Assessment Act 1936 (Cth) ss 21A, 136AA Income Tax Assessment Act 1997 (Cth) s 6-5, subdiv 20-A Electricity Industry Act 2000 (Vic)