ICI Australia Ltd v The Commissioner of Taxation of the Commonwealth of Australia [1994] FCA 663

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JUDGMENT No. an eS, op 2

ecseesevaceceel sessoerscese CATCHWORDS INCOME TAX - assessable income - whether difference between amount paid to principal assumption party assuming taxpayer's liability to redeem debentures at face value on maturity and the face value of the debentures assessable as income in the hands of the taxpayer - whether principal assumption agreement entered into primarily for the purpose of escaping debt to asset ratios in debenture trust deeds involved the carrying out of a profit-making scheme - whether "gain" derived under such an agreement made on revenue or capital account - times at which "gain" assessable - application of Div 16E of Part

III of Income Tax Assessment Act.

INCOME TAX - capital gains tax - whether "gain" derived under principal assumption agreement entered into for debt defeasance purposes is assessable under Part IIIA of Income Tax Assessment Act - whether right to compel performance of principal assumption agreement an "asset" - whether asset disposed of as principal assumption party performs its obligations by redeeming debentures - whether such performance constitutes "discharge" or "satisfaction" within s.160M(3) (b) of Income Tax Assessment Act.

nv nt ed v eral issioner of Taxation (1992) 92 ATC 4239.

ervic v issjo T. tion (1982) 150 CLR 510. Beauchamp (Inspector of Taxes) v FW Woolworth PLC [1990} 1 AC 478. Beswick v Beswick [1967] AC 58. nia utual Life 'ance ociet tt: v

Commissioner of Taxation (1946) 73 CLR 604.

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al neral Ac tance Ltd v Federa issioner of Taxatjon (1977) 137 CLR 373. sioner of ation v Cooling (1990) 22 FCR 42.

i £ ti v loldings ty Limjt (1989) 23 FCR 435. Commissioner of Taxation v Myer Emporium Ltd (1985) 8 FCR 136. Commissioner of Taxation v Myer Emporium Ltd (1987) 163 CLR 199.

Coulls_v_ Bagot's Executor and Trustee Co Ltd (1966) 119 CLR 460.