Narbey v Commissioner of Taxation [2008] FCA 1699

FEDERAL COURT OF AUSTRALIA

Narbey v Commissioner of Taxation [2008] FCA 1699

ADMINISTRATIVE LAW – appeal on question of law – adequacy of Tribunal's reasons – ambit of duty on Tribunal to state its findings of fact – whether duty complied with – simple adoption of all of the Commissioner's submissions – whether reasoning clear – whether ground for judicial review points to any specific deficiency in the reasoning – whether Court should attempt to identify deficiency in that circumstance

INCOME TAXATION – deductions – management fees and interest claimed as deductions – whether outgoings incurred in gaining or producing assessable income – whether outgoings necessarily incurred in carrying on a business for the purpose of gaining or producing assessable income – whether outgoings of capital nature – whether eligible mining deduction – tax avoidance scheme – whether scheme entered into or carried out for dominant purpose of obtaining tax benefit – subjective or objective purpose – penalty tax - failure to consider subjective purpose in relation to penalty

Held: application allowed in part.

Administrative Appeals Tribunal Act 1975 (Cth) ss 43(2B), 44, 44(1) Income Tax Assessment Act 1936 (Cth) ss 79D, 177D, 177D(D), 177F(1) Income Tax Assessment Act 1997 (Cth) ss 8-1, 8-1(2), 330, 330A, 330-15, 330-20, 330-595

Federal Court Rules O 53 r 3

Australian Securities and Investments Commission v Saxby Bridge Financial Planning Pty Ltd (2003) 133 FCR 290 Calder v Commissioner of Taxation (2005) 61 ATR 267 Calder v Commissioner of Taxation (2005) 59 ATR 655 Cliffs International Inc v Federal Commissioner of Taxation (1979) 142 CLR 140 Clowes v Commissioner of Taxation (1954) 91 CLR 209 Commissioner of Taxation v Brand (1995) 31 ATR 326 Commissioner of Taxation v Cooke (2004) 55 ATR 183 Commissioner of Taxation v Emmakell Pty Ltd (1990) 22 FCR 157 Commissioner of Taxation v Hart (2004) 217 CLR 216 Commissioner of Taxation v Lau (1984) 6 FCR 202 Commissioner of Taxation v Starr (2007) 164 FCR 436 Commissioner of Taxation v Walker (1984) 2 FCR 283 Commissioner of Taxation v Zoffanies Pty Ltd (2003) 132 FCR 523 Cooke v Commissioner of Taxation (2002) 51 ATR 223 Copperart Pty Ltd v Federal Commissioner of Taxation (1993) 93 ATC 4779 De Domenico v Marshall (1999) 94 FCR 97 Federal Commissioner of Taxation v Consolidated Press Holdings Ltd (2001) 207 CLR 235 Federal Commissioner of Taxation v McCabe (1990) 26 FCR 431 Federal Commissioner of Taxation v Spotless Services Ltd (1996) 186 CLR 404 Hallstroms Pty Ltd v Commissioner of Taxation (Cth) (1946) 72 CLR 634 HJ Heinz Company Ltd v Chief Executive Officer of Customs (2006) 61 ATR 711 Minister for Immigration and Multicultural Affairs v Yusuf (2001) 206 CLR 323 Peabody v Commissioner of Taxation (1993) 40 FCR 531 Puzey v Commissioner of Taxation (2002) 50 ATR 595 Rana v Military Rehabilitation and Compensation Commission [2005] FCA 6 Roncevich v Repatriation Commission (2005) 222 CLR 115 Sleight v Commissioner of Taxation (2004) 136 FCR 211 Starr v Commissioner of Taxation of the Commonwealth of Australia (2007) 65 ATR 86 TelePacific Pty Limited v Commissioner of Taxation [2005] FCA 158 Telstra Corporation Ltd v Warren, Graham [1997] FCA 102 Tobacco Institute of Australia v National Health & Medical Research Council (1996) 71 FCR 265 Vincent v Commissioner of Taxation (Cth) (2002) ATC 4490 Vincent v Commissioner of Taxation (2002) 124 FCR 350 Waterford v Commonwealth of Australia (1987) 163 CLR 54