Harts Australia Pty Ltd v Commissioner of Taxation [2000] FCA 1131

FEDERAL COURT OF AUSTRALIA

Harts Australia Pty Ltd v Commissioner of Taxation [2000] FCA 1131

TAXATION - agreement between taxpayer company and associated company to transfer to the former, tax deductible losses incurred by associated company - whether agreement effective for the purposes of s 80G the Income Tax Assessment Act 1936 (Cth) when it does not specify amount of the losses transferred - "formula" agreement transferring so much of the associated company's losses as is required to reduce the taxpayer company's taxable income to nil

Income Tax Assessment Act 1936 (Cth) s 80G

Henderson v Commissioner of Taxation of the Commonwealth of Australia (1970) 119 CLR 612 referred to Batagol v The Commissioner of Taxation of the Commonwealth of Australia (1963) 109 CLR 243 referred to Industrial Equity Ltd v Deputy Commissioner of Taxation (1990) 170 CLR 649 referred to CIC Insurance Ltd v Bankstown Football Club Ltd (1997) 187 CLR 384 cited TCN Channel Nine Pty Ltd v Australian Mutual Provident Society (1982) 42 ALR 496 cited

HARTS AUSTRALIA PTY LTD v COMMISSIONER OF TAXATION

Q 204 OF 1999

HARTS CONSULTING PTY LTD v COMMISSIONER OF TAXATION

Q 205 OF 1999

DRUMMOND J 11 AUGUST 2000 BRISBANE

IN THE FEDERAL COURT OF AUSTRALIA

QUEENSLAND DISTRICT REGISTRY Q 204 OF 1999

BETWEEN: HARTS AUSTRALIA PTY LTD

APPLICANT

AND: COMMISSIONER OF TAXATION

RESPONDENT

JUDGE: DRUMMOND J

DATE OF ORDER: 11 AUGUST 2000

WHERE MADE: BRISBANE

THE COURT ORDERS THAT THE QUESTIONS FOR SEPARATE DETERMINATION BE ANSWERED AS FOLLOWS:

1. Whether the document annexed to Exhibit 2 and marked "A1" may constitute an agreement for the purposes of section 80G(6)(c) of the Income Tax Assessment Act ("the Act"), insofar as it does not specify an amount to be transferred.

Answer: No

2. Whether, if the answer to question 1 is "yes", and assuming that the agreement was otherwise valid, the effect of that agreement was spent by the transfer from Bomilsco Pty Ltd to the Applicant of the sum of $190,295.00, as evidenced by the 1993 tax return for the Applicant.