Business & Research Management Pty Ltd v Commissioner of Taxation [2008] FCA 1652

FEDERAL COURT OF AUSTRALIA

Business & Research Management Pty Ltd v Commissioner of Taxation [2008] FCA 1652

INCOME TAX – management fee income discharged by bills of exchange – issue as to appropriate basis of accounting for same for income tax purposes – issue as to measurement of amount of income derived – whether related limited recourse loans impacted measure of income derived – no evidence as to money value of bills. HELD – subject to Arthur Murray, full amount of management fee income derived when fee fell due for payment. Taxation Administration Act 1953 (Cth) ss 14ZZ, 14ZZO Income Tax Assessment Act 1936 (Cth) ss 21, 25 Income Tax Assessment Act 1997 (Cth) s 6-5 Arthur Murray (NSW) Pty Ltd v Federal Commissioner of Taxation (1965) 114 CLR 314 distinguished Ballarat Brewing Company Limited v Federal Commissioner of Taxation (1951) 82 CLR 364 cited Barclays Mercantile Business Finance Ltd v Mawson [2005] 1 AC 684 cited Barratt v Federal Commissioner of Taxation (1992) 36 FCR 222distinguished Brogden v Metropolitan Railway (1877) 2 AC 666 cited Commissioner of Taxation v Dunn (1989) 85 ALR 244 referred to Commissioner of Taxes (SA) v Executor Trustee and Agency Co of South Australia (1938) 63 CLR 108 considered Customs & Excise Commissioners v Diners Club Ltd [1989] 1 WLR 1196 cited Dickenson v Federal Commissioner of Taxation (1958) 98 CLR 460 cited Eisner v Macomber (1920) 252 US 189 cited Equuscorp Pty Ltd v Glengallan Investments Pty Ltd (2004) 218 CLR 471cited Federal Commissioner of Taxation v Broken Hill Pty Co Ltd (2000) 45 ATR 507 cited Federal Commissioner of Taxation v Cooling (1990) 22 FCR 42 cited Federal Commissioner of Taxation v Krakos Investments Pty Ltd (1996) 61 FCR 489 cited Federal Commissioner of Taxation v McNeil (2007) 229 CLR 656 cited Federal Commissioner of Taxation v Montgomery (1999) 198 CLR 639 cited Federal Coke Co Pty Ltd v Federal Commissioner of Taxation (1977) 34 FLR 375 applied Federal Commissioner of Taxation v Australian Gas Light Co (1983) 74 FLR 13cited Federal Commissioner of Taxation v Orica Ltd (1998) 194 CLR 500 applied G.P. International Pipecoaters Pty Ltd v Federal Commissioner of Taxation (1990) 170 CLR 124considered Henderson v Federal Commissioner of Taxation (1968) 119 CLR 612 cited Howland-Rose and Ors v Federal Commissioner of Taxation (2002) 118 FCR 61referred to Integrated Computer Services Pty Limited v Digital Equipment Corp (Aust) Pty Ltd (1988) 5 BPR 11,110 referred to Investment Merchant Finance Corporation Ltd v Federal Commissioner of Taxation (1971) 125 CLR 249 considered MacFarlane v Federal Commissioner of Taxation (1986) 13 FCR 356cited Macquarie Finance Ltd v Federal Commissioner of Taxation (2004) 57 ATR 115 cited Permanent Trustee Co of New South Wales v Federal Commissioner of Taxation (1940) 6 ATD 5distinguished Pobjie Agencies v Vinidex Tubemakers (2000) Aust Contract R 90-112 cited Reuter v Federal Commissioner of Taxation 93 ATC 5030 cited Sun Insurance Office v Clark (1912) AC 443 cited The Countess of Bective v Federal Commissioner of Taxation (1932) 47 CLR 417 cited Toll (FGCT) Pty Ltd v Alphapharm Pty Ltd (2004) 219 CLR 165referred to Vroon v Foster's Brewing Group Ltd [1994] 2 VR 32 cited Vincent v Federal Commissioner of Taxation (2002) 124 FCR 350cited RW Parsons, Income Taxation in Australia: Principles of Income, Deductibility and Tax Accounting, Law Book Company Sydney (1985) BUSINESS AND RESEARCH MANAGEMENT LIMITED (IN LIQUIDATION) ACN 070 946 664 v COMMISSIONER OF TAXATION