Commissioner of Taxation v Marshall & Brougham Pty Ltd [1987] FCA 802

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CATCHWORDS

a

INCOME TAX - deductions - money on short-term loan with failed financial institution written off as a bad debt - whether a loss

on revenue or capital account - whether taxpayer in the business

of the lending of money.

Income Tax Assessment Act 1936 (Cth), ss.51(1), 63(1)(b)

COMMISSIONER OF TAXATION v MARSHALL AND BROUGHAM PTY LIMITED G. 47 OF 1986

BOWEN C.J., JENKINSON J, BURCHETT J ADELAIDE

4 June 1987

IN THE FEDERAL COURT OF AUSTRALIA ) )

SOUTH AUSTRALIA DISTRICT REGISTRY ) No. G47 of 1986 )

GENERAL DIVISION )

ON APPEAL FROM THE SUPREME COURT OF SOUTH AUSTRALIA BETWEEN : : COMMISSIONER OF TAXATION

- and -

MARSHALL AND BROUGHAM PTY LIMITED

CORAM Bowen C.J., Jenkinson and Burchett JJ.

PLACE: Sydney

p

4 June 1987

MINUTE OF ORDERS

THE COURT ORDERS THAT:

The appeal be dismissed with costs.

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

IN THE FEDERAL COURT OF AUSTRALIA

) ) SOUTH AUSTRALIA DISTRICT REGISTRY ) No. G47 of 1986 ) GENERAL DIVISION )

ON APPEAL FROM THE SUPREME COURT OF SOUTH AUSTRALIA BETWEEN :

COMMISSIONER OF TAXATION

- and -

MARSHALL AND BROUGHAM PTY LIMITED

CORAM: Bowen C.J., Jenkinson and Burchett JJ. DATE: 4 June 1987

REASONS FOR JUDGMENT OWEN C.J. : The dispute between the Commissioner of Taxation (the Commissioner) and Marshall and Brougham Pty Limited (the

taxpayer) is whether the taxpayer is entitled to deduct the sum

of $500,000 from its assessable income for the year of income

ended 30 June 1979.

The Commissioner issued a notice of assessment on 17

April 1980 disallowing the deduction. The taxpayer objected and the Commissioner disallowed the objection. The taxpayer

thereupon requested the decision to be referred to the Board of

Review for review. The matter was heard by Taxation Board of No. 1 and a decision given on 31 July 1985 confirming the