Steele, Kathleen Faye v Deputy Commissioner of Taxation [1997] FCA 167

CATCHWORDS

TAXATION - deductions under s.51(1) - whether interest paid on borrowings to purchase land with a view to development to include a motel was deductible on revenue account or was of a capital nature - discussion of cases dealing with the distinction between revenue and capital items with particular reference to the treatment of interest on borrowed monies - effect of the earning of a relatively very small amount of income where claim for interest expense related to a very large amount - discussion of the effect of a change of purpose in relation to the use of borrowed monies - whether interest is on capital account prior to creation of an income earning asset, and on revenue account thereafter. Income Tax Assessment Act 1936, s 51(1)

Wharf Properties Ltd v Commissioner of Inland Revenue [1995] 2 HKLR 552 Wharf Properties Ltd v Commissioner of Inland Revenue of Hong Kong [1997] Simon's TC 351 Travelodge Papua New Guinea Ltd v Chief Collector of Taxes (1985) 85 ATC 4432 John Fairfax & Sons Pty Ltd v Federal Commissioner of Taxation (1959) 101 CLR 30 Commissioner of Taxation v Ampol Exploration Ltd (1986) 13 FCR 545 Commissioner of Taxation v Osborne (1990) 26 FCR 63 Commissioner of Taxation v Cooper (1991) 29 FCR 177 Inglis v Federal Commissioner of Taxation (1980) 80 ATC 4001 Softwood Pulp and Paper Limited v Federal Commissioner of Taxation (1976) 76 ATC 4439 Goodman Fielder Wattie Ltd v Commissioner of Taxation (1991) 29 FCR 376 F C of T v Brand (1995) 95 ATC 4633 Sun Newspapers Limited v The Federal Commissioner of Taxation (1938) 61 CLR 337 Hallstroms Proprietary Limited v The Federal Commissioner of Taxation (1946) 72 CLR 634 Foley Brothers Pty Limited v Federal Commissioner of Taxation (1965) 13 ATD 562

G.P. International Pipecoaters Proprietary Limited v The Commissioner of Taxation of the Commonwealth of Australia (1990) 170 CLR 124 The Commissioner of Taxation of the Commonwealth of Australia v South Australian Battery Makers Proprietary Limited (1978) 140 CLR 645 Labrilda Pty Ltd v Commissioner of Taxation (1996) 65 FCR 119 The Federal Commissioner of Taxation v Munro (1926) 38 CLR 153 Farmer v Scottish North American Trust, Limited [1912] AC 118 The Texas Company (Australasia) Limited v The Federal Commissioner of Taxation (1940) 63 CLR 382 Australian National Hotels Ltd v Commissioner of Taxation (1988) 19 FCR 234 Federal Commissioner of Taxation v Energy Resources of Australia Ltd (1996) 137 ALR 18 Federal Commissioner of Taxation v Total Holdings (Australia) Pty Ltd (1979) 79 ATC 4279 Federal Commissioner of Taxation v Riverside Road Pty Ltd (1990) 90 ATC 4567 Ure v Federal Commissioner of Taxation (1981) 81 ATC 4100 Federal Commissioner of Taxation v Ilbery (1981) 38 ALR 172 Fletcher v The Commissioner of Taxation of the Commonwealth of Australia (1991) 173 CLR 1 Commissioner of Taxation v Roberts (1992) 37 FCR 246 Commissioner of Taxation v Janmor Nominees Pty Ltd (1987) 15 FCR 348 Crawford v F C of T (1993) 93 ATC 5234 Madigan v F C of T (1996) 96 ATC 4640 Brian Reilly Freighters (NSW) Pty Ltd v F C of T (1996) 96 ATC 5122 Cliffs International Inc. v The Commissioner of Taxation of the Commonwealth of Australia (1979) 142 CLR 140 Christchurch Press Company Ltd v Commissioner of Inland Revenue (1993) 15 NZTC 10,206 Federal Commissioner of Taxation v Kowal (1983) 84 ATC 4001 Ronpibon Tin No Liability v Federal Commissioner of Taxation (1949) 78 CLR 47 Commissioner of Taxation v Edwards (1994) 49 FCR 318 KATHLEEN FAYE STEELE -V- DEPUTY COMMISSIONER OF TAXATION WAG 11 & 12 of 1996 Burchett, Ryan and Carr JJ Perth 18 March 1997