Mussalli v Commissioner of Taxation [2020] FCA 544

FEDERAL COURT OF AUSTRALIA

Mussalli v Commissioner of Taxation [2020] FCA 544 File numbers: NSD 2064 of 2018 NSD 2065 of 2018 NSD 2066 of 2018 NSD 2067 of 2018 NSD 2068 of 2018

Judge: JAGOT J

Date of judgment: 28 April 2020

Catchwords: TAXATION — Income tax — Deductibility — Payments made upon entering into lease and licence agreements of franchise restaurants — Payments described as prepayments of rent —Whether payments were capital in nature or on revenue account — Substance and form — Characterisation of advantage sought — Consideration of general principles — Income Tax Assessment Act 1997 (Cth) s 8-1 — Income Tax Assessment Act 1936 (Cth) s 82KZMD

Legislation: Income Tax Assessment Act 1936 (Cth) Income Tax Assessment Act 1997 (Cth) Taxation Administration Act 1953 (Cth)

Cases cited: AusNet Transmission Group Pty Ltd v Federal Commissioner of Taxation [2015] HCA 25; (2015) 255 CLR 439 Colonial Mutual Life Assurance Society Limited v Federal Commissioner of Taxation [1953] HCA 68; (1953) 89 CLR 428 Commissioner of Taxation (Cth) v South Australian Battery Makers Pty Ltd [1978] HCA 32; (1978) 140 CLR 645 Commissioner of Taxation v Creer [1986] FCA 166; (1986) 11 FCR 52 Commissioner of Taxation v Firth [2002] FCAFC 95; (2002) 129 FCR 450 Commissioner of Taxation v Star City Pty Limited [2009] FCAFC 19; (2009) 175 FCR 39 Federal Commissioner of Taxation v Ashwick (Qld) No 127 Pty Ltd [2011] FCAFC 49; (2011) 192 FCR 325 Federal Commissioner of Taxation v Broken Hill Pty Co Ltd [2000] FCA 1431; (2000) 179 ALR 593 Federal Commissioner of Taxation v Citibank Limited [1993] FCA 607; (1993) 44 FCR 434 Federal Commissioner of Taxation v Email Limited (1999) 42 ATR 698 Federal Commissioner of Taxation v Sharpcan Pty Ltd [2019] HCA 36; (2019) 93 ALJR 1147 Hallstroms Pty Ltd v Federal Commissioner of Taxation [1946] HCA 34; (1946) 72 CLR 634 Healius Ltd v Federal Commissioner of Taxation [2019] FCA 2011 National Australia Bank Ltd v Commissioner of Taxation [1997] FCA 514; (1997) 80 FCR 352 St George Bank v Commissioner of Taxation [2008] FCA 453; (2008) 69 ATR 634 Sun Newspapers Ltd v Commissioner of Taxation [1938] HCA 73; (1938) 61 CLR 337 Texas Co (Australasia) Ltd v Federal Commissioner of Taxation [1940] HCA 9; (1940) 63 CLR 382 Tucker v Granada Motorway Services Ltd [1979] All ER 801 Tyco Australia Pty Ltd v Federal Commissioner of Taxation [2007] FCA 1055; (2007) 67 ATR 63