Metals Manufactures Ltd v Commissioner of Taxation [1999] FCA 1712

FEDERAL COURT OF AUSTRALIA

Metal Manufactures Ltd v Commissioner of Taxation [1999] FCA 1712 TAXES & DUTIES – income tax – deductions under s 51(1) Income Tax Assessment Act 1936 – sale and lease-back of heavy plant and equipment in taxpayer's factory – deductibility of lease payments made by taxpayer in respect of plant and equipment – whether plant and equipment fixtures or chattels – nature of interest acquired by purchaser in plant and equipment – whether transaction ineffective as sale and lease-back – whether transaction should be characterised as, in substance, a loan – whether payments under lease secured a collateral advantage to taxpayer, being a practical right to reacquire plant and equipment at expiration of lease at a low residual value TAXES & DUTIES – income tax – schemes to reduce income tax – whether dominant purpose of enabling taxpayer to obtain a tax benefit Income Tax Assessment Act 1936 (Cth), s 51(1), s177D Australian Provincial Assurance Co. Ltd v Coroneo [1938] 38 SR(NSW) 700, followed Eon Metals NL v Commissioner of State Taxation (WA) (1991) 91 ATC 4841, considered National Dairies WA Ltd v Commissioner of State Revenue [1999] WASCA 152, cited Re Starline Furniture Pty Ltd (1982) 6 ACLR 312, cited Eastern Nitrogen Ltd v Commissioner of Taxation [1999] FCA 1536, considered Ronpibon Tin NL v Federal Commissioner of Taxation (1949) 78 CLR 47, cited Federal Commissioner of Taxation v South Australian Battery Makers Pty Ltd (1978) 140 CLR 645, applied Federal Commissioner of Taxation v Spotless Services Ltd (1996) 186 CLR 404, applied

METAL MANUFACTURES LTD v COMMISSIONER OF TAXATION NG668 OF 1997

NG669-678 OF 1997 EMMETT J

8 DECEMBER 1999 SYDNEY

IN THE FEDERAL COURT OF AUSTRALIA NG 668 OF 1997

NEW SOUTH WALES DISTRICT REGISTRY NG 669-678 OF 1997

BETWEEN: METAL MANUFACTURES LIMITED