Commissioner of Taxation v Broken Hill Pty Company Ltd [2000] FCA 1431

FEDERAL COURT OF AUSTRALIA

Commissioner of Taxation v Broken Hill Pty Company Ltd [2000] FCA 1431

INCOME TAX – allowable deductions – agreement for purchase by taxpayer of shares in mining companies "as at and from" 1 January 1983 for $2410 million – provision for payment of "interest" on purchase price from 31 December 1982 to Closing Date (in the event, 2 April 1984) at 12 per cent but not to exceed combined net income of the companies for the period - $198 million paid as "interest" – whether "an outgoing of capital or of a capital nature" – deduction claimed by taxpayer in 1984 year of income resulting in loss for that year and partial carry forward of deduction in 1985 year – whether Commissioner can amend for 1985 year – letter from taxpayer to Commissioner referring to interest on "the loan" – whether full and true disclosure – whether additional tax properly fixed by reference to interest on underpaid tax

Income Tax Assessment Act 1936 (Cth) ss 51(1), 80, 170(2)

Commissioner of Taxation v Ryan (2000] 168 ALR 704 cited Harvela Investments Ltd v Royal Trust Company of Canada (CI) Ltd [1986] 1 AC 207 referred to Chevron Petroleum (UK) Ltd v BP Petroleum Ltd (1981) 57 TC 137 referred to Inland Revenue Commissioners v Pullman Car Co Ltd [1954] 1 WLR 1029 referred to Commissioner of Taxation v Midland Railway Co of WA Ltd (1952) 85 CLR 306 referred to Colonial Mutual Life Assurance Society Ltd v Federal Commissioner of Taxation (1953) 89 CLR 428 discussed Hallstroms Pty Ltd v Commissioner of Taxation (1946) 72 CLR 634 discussed Commissioner of Taxation v South Australian Battery Makers (1978) 140 CLR 645 discussed Sun Newspapers Ltd & Associated Newspapers Ltd v Commissioner of Taxation (1938) 61 CLR 337 referred to BP Australia Ltd v Commissioner of Taxation (1965) 112 CLR 386 referred to Fletcher v Commissioner of Taxation (1991) 173 CLR 1 cited NM Superannuation Pty Ltd v Young (1993) 41 FCR 182 cited Radaich v Smith (1959) 101 CLR 209 cited Hannan & Allen v Australian Mutual Provident Society (unreported, Supreme Court of Victoria, 15 November 1996) cited Texas Co (Australasia) Ltd v Commissioner of Taxation (1940) 63 CLR 382 cited Steele v Deputy Commissioner of Taxation (1999) 197 CLR 459 cited National Australia Bank v Commissioner of Taxation (1997) 151 ALR 225 cited Duggan & Ryall v Commissioner of Taxation (1972) 129 CLR 365 cited Australia and New Zealand Savings Bank Ltd v Commissioner of Taxation (1993) 42 FCR 535 cited Austin Distributors Pty Ltd v Commissioner of Taxation (1964) 13 ATD 429 referred to MIM Holdings Ltd v Commissioner of Taxation (1997) 36 ATR 108 referred to Stapleton v Commissioner of Taxation (1989) 20 ATR 996 referred to Foster v Commissioner of Taxation (1951) 82 CLR 606 referred to Commissioner of Taxation v Levy (1961) 106 CLR 448 discussed Charles Moore & Co (WA) Pty Ltd v Commissioner of Taxation (1956) 95 CLR 344 referred to W Thomas & Co Pty Ltd v Commissioner of Taxation (1965) 115 CLR 58 cited Willingale (HM Inspector of Taxes) v International Commercial Bank Ltd [1978] AC834 referred to Minister for Aboriginal Affairs v Peko Wallsend Ltd (1986) 162 CLR 24 referred to Cohen v Commissioner of Taxation [2000] FCA 833 referred to Tapp v Lee (1803) 3 Bos and Pul 367 at 371 applied Krakowski v Eurolynx Properties Limited (1995) 183 CLR 563 at 575 applied