Montgomery, Paul v Commissioner of Taxation [1998] FCA 46

FEDERAL COURT OF AUSTRALIA INCOME TAX - assessable income - firm of solicitors moving to new premises - lease incentive - whether capital or income Selleck v Commissioner of Taxation (1997) 97 ATC 4,856 discussed Wattie v Commissioner of Inland Revenue (1997) 18 NZTC 13,297 discusssed Investment and Merchant Finance Corporation Ltd v Federal Commissioner of Taxation (1971) 125 CLR 249 referred to Californian Copper Syndicate Ltd v Harris (1904) 5 TC 159 referred to Elsey v Federal Commissioner of Taxation (1960) 121 CLR 99 referred to Federal Commissioner of Taxation v Myer Emporium Ltd (1987) 163 CLR 199 distinguished Federal Commissioner of Taxation v Becker (1952) 87 CLR 456 at 467 referred to Edwards (Inspector of Taxes) v Bairstow [1956] AC 14 referred to Commissioner of Taxation v Cooling (1990) 22 FCR 42 distinguished Lister Blackstone Pty Ltd v Commissioner of Taxation (1974) 134 CLR 457 discussed Sun Newspapers Ltd v Federal Commissioner of Taxation (1938) 61 CLR 337 referred to British Insulated and Helsby Cables Ltd v Atherton [1926] AC 205 referred to

PAUL MONTGOMERY v COMMISSIONER OF TAXATION NO. VG 176 and 177 of 1997 JUDGES: DAVIES, LOCKHART AND HEEREY JJ DATE: 6 FEBRUARY 1998 PLACE: MELBOURNE

IN THE FEDERAL COURT OF AUSTRALIA

VICTORIA DISTRICT REGISTRY VG 176 and 177 of 1997

BETWEEN: PAUL MONTGOMERY

AppELLANT

AND: COMMISSIONER OF TAXATION

Respondent

JUDGES: DAVIES, LOCKHART and HEEREY JJ

DATE OF ORDER: 6 FEBRUARY 1998

WHERE MADE: MELBOURNE

THE COURT ORDERS THAT: 1. The appeals be allowed. 2. The orders made by the trial judge are set aside and in lieu thereof it be ordered that: (a) The objection decisions for the years ended 30 June 1991 and 1992 be set aside. (b) The objections to the assessments for the years ended 30 June 1991 and 1992 be allowed insofar as they sought the exclusion from the appellant's assessable income of his share in the subject lease incentive payments. (c) The matter be remitted to the Commissioner of Taxation to amend the assessments accordingly. (d) The respondent pay the costs of the proceedings before the Court. 3. The cross-appeals be dismissed. 4. The respondent pay the costs of the appeals and of the cross-appeals. Note: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.