Glenfield Estates Pty Ltd v Commissioner of Taxation [1988] FCA 432

JUDGMENT No. 4307 88...

CATCHWORDS

INCOME TAX - Whether land acquired for the purpose of development and resale was trading stock of a business of dealing in land - whether payment to extinguish option over land is deductible from assessable income pursuant to sub-s. 51(1) of the Income Tax

Assessment Act - whether grant of option and subsequent

assignments had connection with business of land development - relationship between two limbs of sub-s. 51(1) - transactions explicable only as measures intended to reduce liability to tax - relevance of purpose in determining character of , payment - payment of private nature excluded from scope of allowable deductions under sub-s. 51(1) -~ whether any component of the transaction was a "sham" - whether grant of option effected a

disposition of the land within the meaning of ss. 36 and 36A of

the Income Tax Assessment Act - circumstances in which s. 36A can

apply.

Income Tax Assessment Act 1936 (Cth): ss. 36, 36A, 51, 226, 260.

GLENFIELD ESTATES PTY. LIMITED v THE COMMISSIONER OF TAXATION

G251 of 1987

LOCKHART, WILCOX and FRENCH JJ. 26 JULY 1988

SYDNEY

fae aac, Coen poe TY

IN THE FEDERAL COURT OF AUSTRALIA

NEW SOUTH WALES DISTRICT REGISTRY

GENERAL DIVISION

THE

1.

JUDGES MAKI DATE ORDER

WHERE ORDER MADE:

ee ee ee

No.

G251 of 1987

ON APPEAL FROM THE SUPREME COURT OF

NEW SOUTH WALES

BETWEEN:

AND:

NG ORDER:

Appellant

THE COMMISSIONER OF TAXATION

Respondent

MADE: 26 JULY 1988

SYDNEY

MINUTE OF ORDERS

COURT ORDERS THAT:

LOCKHART, WILCOX and FRENCH JJ.

GLENFIELD ESTATES PTY. LIMITED

The appeal be allowed with respect to the application of s. 226

of the Income Tax Assessment Act 1936 to the return furnished

by the appellant in respect of the year ended 30 June 1978.

The responden tax of the excising the

$597,501.36.

t be directed to amend his assessment to

appellant for the

year

ended