O'Connell v Commissioner of Taxation [2002] FCA 904

FEDERAL COURT OF AUSTRALIA

O'Connell v Commissioner of Taxation [2002] FCA 904 INCOME TAX – whether payment constituted assessable income for purposes of s 25(1) Income Tax Assessment Act 1936 (Cth) – whether payment constituted capital – where payment received in return for entering into agreement to lease business premises – where transaction a profit‑making scheme as a significant purpose of entering into agreement was to make a profit or gain – incentive payments common practice in leasing agreements for business premises in the Melbourne central business district – where payment was received in course of business as an ordinary incident of part of firm's business. Income Tax Assessment Act 1936 (Cth): s 25(1) Western Gold Mines NL v Commissioner of Taxation (Western Australia) (1938) 59 CLR 729, referred to Commissioner of Taxation v Myer Emporium Limited (1987) 163 CLR 199, applied Commissioner of Taxation v Cooling (1990) 22 FCR 42, applied Selleck v Commissioner of Taxation (1997) 78 FCR 102, distinguished Commissioner of Taxation v Montgomery (1999) 198 CLR 639, applied Westfield Limited v Commissioner of Taxation (1991) 28 FCR 333, considered JOHN JOSEPH O'CONNELL v COMMISSIONER OF TAXATION OF THE COMMONWEALTH OF AUSTRALIA VG 283 of 1997 GOLDBERG J 22 JULY 2002 MELBOURNE

IN THE FEDERAL COURT OF AUSTRALIA

VICTORIA DISTRICT REGISTRY VG 283 of 1997

BETWEEN: JOHN JOSEPH O'CONNELL

Applicant

AND: COMMISSIONER OF TAXATION OF THE COMMONWEALTH OF AUSTRALIA

Respondent

JUDGE: GOLDBERG J

DATE OF ORDER: 22 JULY 2002

WHERE MADE: MELBOURNE

THE COURT ORDERS THAT: 1. The appeal be dismissed. 2. The applicant pay the respondent's costs of and incidental to the appeal. Note: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules