Spassked Pty Ltd v Commissioner of Taxation (No 5) [2003] FCA 84

FEDERAL COURT OF AUSTRALIA

Spassked Pty Ltd v Commissioner of Taxation (No 5) [2003] FCA 84

INCOME TAX – deduction – interest on loan – group of numerous companies – shares of ultimate holding company (IEL) listed on Australian Stock Exchange – intermediate holding company (Spassked) borrowed funds from finance company (IEF) within the group – Spassked, a large "dividend trap" and loss making company – Spassked incurred interest on borrowed funds – used borrowed funds to subscribe for shares in subsidiary (GIH) – GIH established with two classes of shares, "A" and "B" – "A" class, carrying right to franked and unfranked dividends, held by Spassked – "B" class, carrying right to franked dividends only, held by IEL – GIH invested profitably in various subsidiary companies – Spassked incurred tax losses as a result of interest expenses – Spassked transferred tax losses pursuant to s 80G of the Income Tax Assessment Act 1936 (Cth) to other members of the corporate group – whether interest an allowable deduction under s 51(1) of the Income Tax Assessment Act 1936 (Cth) – whether, in consequence, losses had been available to be transferred – whether Spassked had expectation of gaining or producing assessable income – whether subjective purpose in incurring expense relevant to determining deductibility under s 51(1) of the Income Tax Assessment Act 1936 (Cth) – significance of "expectations" – whether expectation of receipt of dividends occasioned the borrowing of money from IEF at interest INCOME TAX – Commissioner's contention that application incompetent as no amount of tax payable in the relevant year of income and therefore no "assessment" within the meaning of s 175A of the Income Tax Assessment Act 1936 (Cth) – whether determination that no amount of tax payable is not an "assessment" within the meaning of s 175A of the Income Tax Assessment Act 1936 (Cth) and, therefore, not an "appealable objection decision" with which the taxpayer is "dissatisfied" within the meaning of s 14ZZ of the Taxation Administration Act 1953 (Cth)