Ashton Mining Ltd v Commissioner of Taxation [2000] FCA 590

FEDERAL COURT OF AUSTRALIA

Ashton Mining Ltd v Commissioner of Taxation [2000] FCA 590 INCOME TAX – Allowable deduction – Loan written off – Forgiveness of inter-company loan – Whether loss incurred as a result of "disposal or redemption" of a "traditional security" – Whether debt forgiveness without consideration or a deed can operate to discharge legal liability to repay the debt EQUITY – Equitable estoppel – whether equitable rights only arise upon an unjust or unconscionable departure or threatened departure from an assumption adopted by the party asserting the estoppel Income Tax Assessment Act 1936 ss 26BB(1), 26BB(2), 70B(2) and 159GP(1) Joachimson v Swiss Bank Corporation [1921] 3 KB 110 – distinguished Hart (Inspector of Taxes) v Sangster [1957] 1 Ch 329 – distinguished FAI Traders Insurance Company Ltd v Savoy Plaza Pty Ltd [1993] 2 VR 343 – applied Lonsdale Sand and Metal Pty Ltd v Commissioner of Taxation (1998) 81 FCR 419 – distinguished Creamoata Limited v The Rice Equalization Association Limited (1953) 89 CLR 286 – distinguished Snelling v John G Snelling Ltd [1973] 1 QB 87 - distinguished Commonwealth of Australia v Verwayen (1990) 170 CLR 394 – considered Waltons Stores (Interstate) Limited v Maher (1988) 164 CLR 387 – considered Bucknell v Commercial Banking Co of Sydney Ltd (1937) 58 CLR 155 - cited ASHTON MINING LIMITED v COMMISSIONER OF TAXATION VG 706 of 1998 JUDGE: MERKEL J PLACE: MELBOURNE DATE: 8 MAY 2000

IN THE FEDERAL COURT OF AUSTRALIA

VICTORIA DISTRICT REGISTRY VG 706 of 1998

BETWEEN: ASHTON MINING LIMITED

(ACN 005 466 964)

APPLICANT

AND: COMMISSIONER OF TAXATION

RESPONDENT JUDGE: MERKEL J

DATE OF ORDER: 8 MAY 2000

WHERE MADE: MELBOURNE

THE COURT ORDERS THAT: 1. The appeal of the applicant be dismissed. 2. The applicant pay the respondent's costs of and incidental to the appeal.