Eastern Nitrogen Ltd v Commissioner of Taxation [1999] FCA 1536

FEDERAL COURT OF AUSTRALIA

Eastern Nitrogen Ltd v Commissioner of Taxation [1999] FCA 1536

TAXATION - sale and lease back - whether lease rentals, valuations and establishment fee deductible - whether goods the subject of the sale and lease back fixture or chattel - whether unsevered fixture capable of being made subject to separate sale - whether arrangement a sham because transaction legally ineffectual - whether transaction falls within Pt IVA the Income Tax Assessment Act 1936 (Cth) - whether the subjective purpose of the transaction can be taken into account in determining purpose for s 177D(b)

Tax Administration Act 1953 (Cth) ss 14ZAAE, 14ZAAH, 14ZAAL, 14ZZO(b), 14ZZ, Pt IVAAA Income Tax Assessment Act 1936 (Cth) ss 51(1), 59(2), 59(2A), 60, 67, 170BA(3), 177A, 177C, 177D, 177F, Pt IVA Australian Provincial Assurance Co Ltd v Coroneo (1938) 38 SR(NSW) 700 cited NH Dunn Pty Ltd v LM Ericsson Pty Ltd [1979] 2 BPR 9241 cited Eon Metals NL v Commissioner of State Taxation (WA) (1991) 91 ATC 4,841 applied Reid v Smith at (1905) 3 CLR 656 cited Belgrave Nominees Pty Ltd v Barlin-Scott Air Conditioning (Aust) Pty Ltd [1984] VR 947 cited North Shore Gas Co Ltd v Commissioner of Stamp Duties (NSW) (1940) 63 CLR 52 cited Wake v Hall (1883) 8 App Cas 195 cited London County Council v Wilkins (Valuation Officer) [1957] AC 362 cited Commissioner of Taxation v Email Ltd (1999) ATC 4,868; [1999] FCA 1177 cited Magna Alloys Research Pty Ltd v Federal Commissioner of Taxation (1980) 49 FLR 183 applied Commissioner of Taxation v Just Jeans Pty Ltd (1987) 16 FCR 110 applied Ure v Federal Commissioner of Taxation (1981) 34 ALR 237 cited Fletcher v Federal Commissioner of Taxation (1991) 173 CLR 1 cited Melluish v BMI (No 3) [1996] AC 454 applied Anthony v Commonwealth (1973) 47 ALJR 83 cited Jarvis v Jarvis [1893] 63 LJ Ch 10 cited Horsfall v Thomas Hey (1848) 2 Exch 778 cited Emanuel (Rundle Mall) Pty Ltd v Commissioner of Stamps (SA) (1986) 86 ATC 4,004 considered Kay's Leasing Corporation Pty Ltd v CSR Provident Fund Nominees Pty Ltd [1962] VR 429 cited United Scientific Holdings Ltd v Burnley Borough Council [1978] AC 904 cited Commissioner of Stamp Duties v JV (Crows Nest) Pty Ltd (1987) 7 NSWLR 529 cited Edge v Boileau (1885) 16 QBD 117 cited Martins Camera Corner Pty Ltd v Hotel Mayfair Ltd [1976] 2 NSWLR 15 cited Austin v United Dominions Corporation Ltd [1984] 2 NSWLR 612 cited Bellinz v Commissioner of Taxation (1998) 84 FCR 154 cited Snook v London and West Riding Investments Ltd [1967] 2 QB 786 cited Richard Walter Pty Ltd v Commissioner of Taxation (1996) 67 FCR 243 cited Federal Commissioner of Taxation v Spotless Services Ltd (1996) 186 CLR 404 followed Peabody v Federal Commissioner of Taxation (1993) 40 FCR 531 cited Commissioner of Taxation v Consolidated Press Holdings Ltd [1999] FCA 1199 cited Allied Pastoral Holdings Pty Ltd v Federal Commissioner of Taxation [1983] 1 NSWLR 1 cited CC (New South Wales) Pty Ltd (In Liq) v Federal Commissioner of Taxation (1997) ATC 4,123 not followed Federal Commissioner of Taxation v Peabody (1994) 181 CLR 359 followed Federal Commissioner of Taxation v ANZ Savings Bank Ltd (1994) 181 CLR 466 cited Palmer and McKendrick, Interests in Goods, 2nd ed Benjamin, Sale of Goods, 4th ed EASTERN NITROGEN LIMITED v COMMISSIONER OF TAXATION QG 197 OF 1995 QG 22 OF 1996 DRUMMOND J 5 NOVEMBER 1999 BRISBANE