Drummond v Commissioner of Taxation [2005] FCA 1129

FEDERAL COURT OF AUSTRALIA Drummond v Commissioner of Taxation [2005] FCA 1129 INCOME TAX - Appeal from Administrative Appeals Tribunal ('AAT') - where AAT affirmed Commissioner's decision to disallow deduction for expenditure allegedly incurred in managing tax affairs or complying with obligations imposed by Commonwealth law relating to tax affairs of an entity pursuant to s 25-5 of the Income Tax Assessment Act 1997 (Cth) - where expenditure the subject of claimed deduction purportedly for legal fees in consideration for tax advice - whether AAT ought to have conducted apportionment exercise in relation to fees deductible pursuant to s 25-5 and those fees outside the scope of that section when no evidence called on apportionment - appeal dismissed

Administrative Appeals Tribunal Act (1975) (Cth) s 44 Fringe Benefits Tax Assessment Act 1986 (Cth) Income Tax Assessment Act 1936 (Cth) Income Tax Assessment Act 1997 (Cth) s 25-5 Superannuation Contributions Tax (Assessment and Collection) Act 1997 (Cth)

Bartlett & Anor v Federal Commissioner of Taxation 2003 ATC 4962 applied Browne v Dunn (1893) 6 R 67 cited City Link Melbourne v Federal Commissioner of Taxation (2004) 211 ALR 207 applied Commissioner of Taxation v Glennan (1999) 90 FCR 538 applied Essenbourne Pty Ltd v Federal Commissioner of Taxation 2002 ATC 5201 cited Falcetta v Federal Commissioner of Taxation 2004 ATC 4514 applied Federal Commissioner of Taxation v Broken Hill Pty Co Ltd (2000) 179 ALR 593 applied Federal Commissioner of Taxation v Raptis (1989) 89 ATC 4994 cited Harris v Federal Commissioner of Taxation (2002) 125 FCR 46 cited Prebble v Federal Commissioner of Taxation (2003) 131 FCR 130 cited Re Ruddock (in his capacity as Minister for Immigration & Multicultural Affairs); Ex parte Applicant S154/2002 (2003) 201 ALR 437 cited Roads Corporation v Dacakis [1995] 2 VR 508 cited Ronpibon Tin NL v Federal Commissioner of Taxation (1949) 78 CLR 47 cited Tax Agents' Board of New South Wales v Martin (1997) 97 ATC 4192 cited Walstern Pty Ltd v Federal Commissioner of Taxation (2003) 138 FCR 1 cited PHILLIP DRUMMOND v COMMISSIONER OF TAXATION NSD 49 OF 2005 HELY J 16 AUGUST 2005 SYDNEY