Vincent, Julie K v Commissioner of Taxation

FEDERAL COURT OF AUSTRALIA

Vincent v Commissioner of Taxation [2002] FCA 656

INCOME TAX - allowable deductions - outgoings incurred - cattle breeding project - management and leasing fees - fees partially funded by limited recourse loan - management, leasing and finance companies under common control - loan payments never made - whether cash outlay by taxpayer and expenditure incurred in connection with the gaining of assessable income - disproportion between outgoings and income - nil income for initial period of project - whether loan agreement a sham - project not viable - whether non-payment of part fees by loan company to management company affects ability of taxpayer to claim that part of fees as deduction - Part IVA Income Tax Assessment Act - tax benefit - objective purpose - taxpayer's purpose - promoter's purpose - objection decision confirmed.

Income Tax Assessment Act 1936 (Cth) Part IVA, s 51(1), s 51(2), s 177A(1), s 177D, s 177C, s 177F(1), s 177G Taxation Administration Act 1953 s 144ZZ(a)

Ronpibon Tin NL v Federal Commissioner of Taxation (1949) 78 CLR 47 cited Federal Commissioner of Taxation v Snowden and Willson Pty Ltd (1958) 99 CLR 431 cited Lunney v Federal Commissioner of Taxation (1958) 100 CLR 478 cited Magna Alloys and Research Pty Ltd v Federal Commissioner of Taxation (1980) 33 ALR 213 cited Fletcher v Federal Commissioner of Taxation (1991) 173 CLR 1 cited John v Federal Commissioner of Taxation (1989) 166 CLR 417 cited Commissioner of Taxation v Finn (1961) 106 CLR 60 cited John Fairfax and Sons Pty Ltd v Federal Commissioner of Taxation (1959) 101 CLR 30 cited Steele v Commissioner of Taxation (1999) 197 CLR 459 cited Clowes v Federal Commissioner of Taxation (1954) 91 CLR 209 cited Milne v Federal Commissioner of Taxation (1976) 133 CLR 526 cited Enviro Systems Renewable Resources Pty Ltd v Australian Securities and Investments Commission (2001) 80 SASR 1 cited Federal Commissioner of Taxation v Lau (1984) 6 FCR 202 cited Snook v London and West Riding Investments (1967) 1 All ER 518 cited Sharrment Pty Ltd v Official Trustee in Bankruptcy (1988) 18 FCR 449 cited Osric Investments Pty Ltd v Woburn Downs Pastoral Pty Ltd [2001] FCA 1402 cited Jekos Holdings Pty Ltd v Australian Horticultural Finance Pty Ltd (1996) 34 ATR 41 cited O'Reilly v The Commissioners of the State Bank of Victoria (1983) 153 CLR 1 cited Carltona Ltd v Commissioner of Works (1943) 2 All ER 560 cited Commissioner of Taxation v Consolidated Press Holdings Ltd (No 1) (1999) 91 FCR 524 cited Peabody v Federal Commissioner of Taxation (1993) 40 FCR 531 cited Eastern Nitrogen Ltd v Federal Commissioner of Taxation (2001) 108 FCR 27 cited CC (New South Wales) Pty Ltd (In Liq) v Federal Commissioner of Taxation 97 ATC 4123 cited Federal Commissioner of Taxation v Spotless Services Ltd (1996) 186 CLR 404 cited Federal Commissioner of Taxation v Consolidated Press Holdings Ltd (2001) 179 ALR 625 cited JULIE K VINCENT v THE COMMISSIONER OF TAXATION OF THE COMMONWEALTH OF AUSTRALIA W202 OF 2000 AND W203 OF 2000 FRENCH J 24 MAY 2002 PERTH