Commissioner of Taxation v. Ampol Exploration Ltd [1986] FCA 554

5S kay

CATCHWORDS

INCOME TAX - Allowable deduction - prospecting or exploration expenses of petroleum exploration company - whether expenditure incurred incidental and relevant to gaining or producing assessable income - whether nexus between the expenditure and the carrying on of the relevant business - whether prospecting or exploration expenses are of a capital or revenue nature - question of fact - whether s. 260

applies.

Income Tax Assessment Act 1936 (Cth): ss. 51 and 260.

THE COMMISSIONER OF TAXATION OF THE COMMONWEALTH OF AUSTRALIA v. AMPOL EXPLORATION LIMITED

G49 of 1986

Lockhart, Beaumont and Burchett JJ. 27 November 1986

Sydney

N_THEENERAL

ER COURT OF AUSTRALIA S REGISTRY VISION

No. G 49 of 1986

weer

ON APPEAL FROM THE SUPREME COURT OF NEW SOUTH WALES

BETWEEN : THE COMMISSIONER OF TAXATION OF OMMONWEALTH OF AUSTRALIA

Appellant AND: AMPOL EXPLORATION LIMITED

Respondent

JUDGES MAKING ORDER: LOCKHART, BEAUMONT and BURCHETT JJ.

DATE OF ORDER: 27 NOVEMBER 1986 WHERE ORDER MADE: SYDNEY

MINUTE OF ORDERS

THE COURT ORDERS THAT:

The appeal be dismissed.

The cross appeal be allowed.

The assessment be remitted to the Commissioner of Taxation to be amended by allowing the deduction to Ampol Exploration Limited of $3,475,339.71 as claimed by it in its return of income for the year ended 30 September 1980 and reducing its assessable income accordingly.

The Commissioner of Taxation pay the costs of Ampol Exploration Limited of the appeal and cross appeal to this Court and of the appeal to the Supreme Court of New South

Wales.

Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.

IN THE FEDERAL COURT OF AUSTRALIA

NEW SOUTH WALES DISTRICT REGISTRY No. G 49 of 1986

ed

GENERAL DIVISION

ON APPEAL FROM THE SUPREME COURT OF NEW SOUTH WALES

BETWEEN: THE COMMISSIONER OF TAXATION OF THE COMMONWEALTH OF AUSTRALIA