Bill Acceptance Corp Ltd v Commissioner of Taxation [1996] FCA 341

CATCHWORDS INCOME TAX - dividend - whether payment of purported dividend to taxpayer which held shares as mortgagee was truly a "dividend" for purposes of sub-s 44 (1) and 46 (2) of Income Tax Assessment Act 1936 - payment also part of larger commercial arrangement - effect of contract by company to declare and pay dividend to mortgagee-shareholder - whether payment deprived of character of dividend. Income Tax Assessment Act 1936, ss 44 (1), 46 (2). BILL ACCEPTANCE CORPORATION LIMITED v COMMISSIONER OF TAXATION No NG 358 OF 1995 Lindgren J Sydney 13 May 1996

IN THE FEDERAL COURT OF AUSTRALIA) NEW SOUTH WALES DISTRICT REGISTRY) No NG 358 of 1995 GENERAL DIVISION ) BETWEEN: BILL ACCEPTANCE CORPORATION LIMITED Applicant AND: COMMISSIONER OF TAXATION Respondent CORAM: Lindgren J PLACE: Sydney DATE: 13 May 1996 MINUTE OF ORDERS THE COURT ORDERS: 1. THAT the appeal be allowed. 2. THAT the respondent pay the applicant's costs. 3. THAT the proceeding be stood over to Monday 20 May 1996 at 9.30 am before Lindgren J for the making of any further orders. 4. THAT by 5.00 pm on Thursday 16 May 1996 the parties supply to the Associate to Lindgren J agreed short minutes of any further orders to be made on 20 May 1996 and if agreement has not by then been reached, short minutes of the orders for which they will respectively contend. NOTE: 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 NG 358 of 1995 GENERAL DIVISION ) BETWEEN: BILL ACCEPTANCE CORPORATION LIMITED Applicant AND: COMMISSIONER OF TAXATION Respondent CORAM: Lindgren J PLACE: Sydney DATE: 13 May 1996 REASONS FOR JUDGMENT INTRODUCTION The applicant ("BAC") appeals pursuant to s 14ZZ of the Taxation Administration Act 1953 against a decision of the respondent ("the Commissioner"). The decision was notified on 24 March 1995 and relates to income tax payable by BAC for the year ended 30 September 1990 (in lieu of 30 June 1990). BAC appeals against the Commissioner's rejection of BAC's claimed entitlement to a rebate under sub-s 46 (2) of the Income Tax Assessment Act (1936) ("the Act") in respect of what it contends was a "dividend" of $24,808,553 received by BAC on 4 July 1990 from Ausintel Investments Australia Pty Ltd ("AIA"). I will sometimes refer to that payment made by AIA to BAC on that date as a "dividend" without prejudice to the question for decision whether it was truly in the nature of a dividend.