Federal Court of Australia
CATCHWORDS
Income tax - Deductibility of outgoings - Legal expenses in defence of directors and agents charged with criminal offences - Payments by corporation - "necessarily incurred in carrying on a business" - Criteria of deductibility - Characterization of outgoings - Taxpayer's purpose - Objective purpose - Relevance of motive - Deductibility of legal costs of criminal proceedings - Outgoings of a private
or capital nature.
Income Tax Assessment Act 1936 (Cth.), s.51(1).
Magna Alloys §& Research Pty. Ltd. v. Commissioner of Taxation of the Commonwealth of Australia
No. G107-9 of 1978.
Coram : Brennan, Deane and Fisher JJ.
Date : 2 December 1980.
Sydney.
IN THE FEDERAL COURT OF AUSTRALIA NEW SOUTH WALES DISTRICT REGISTRY
)
)
} No. 6107-9 of 1978 GENERAL DIVISION )
ON APPEAL FROM THE SUPREME COURT OT NEW SOUTH WALES, ADMINISTRATIVE LAW DIVISION
BETWEEN : MAGNA ALLOYS §& RESLARCH PTY.LTD.
Appellant AND : COMMISSIONER OF TAXATION OF THF COMMONWEALTH OF AUSTRALIA Respondent ORDERS JUDGES MAKING ORDERS : Brennan, Deane and Fisher JJ. DATE OF ORDERS_ : 2 December 1980. WHERE MADD : Sydney.
THE COURT ORDERS THAT
In Appeal No. G107 of 1978: 1. The appeal be allowed.
2. The order of the Supreme Court of New South Wales in appeal no, 68 of 1976 be set aside and in lieu thereof it he ordered that -
(a) the appeal to the Supreme Court be allowed; (b) the appellant's assessable income for the year ended 30 June 1974 be reduced by the sum of $19,459.00; (c) the assessment of the appellant to tax for that year be remitted to the respondent for amendment accordingly;
(d) the respondent pay to the appellant its costs of the appeal to the Supreme Court.
3. The respondent pay to the appellant its costs of this appeal.
In Appeal No. G108 of 1978
1. The appeal be allowed.
2. The order of the Supreme Court of New South Wales in appeal no. 69 of 1976 be set aside and in lieu thereof it be ordered that -
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