BBlood Enterprises Pty Ltd v Commissioner of Taxation [2022] FCA 1112

FEDERAL COURT OF AUSTRALIA

BBlood Enterprises Pty Ltd v Commissioner of Taxation [2022] FCA 1112 File number(s): VID 114 of 2020 VID 247 of 2021

Judgment of: THAWLEY J

Date of judgment: 19 September 2022

Catchwords: TAXATION – whether notice of assessment issued to trustee an original or amended assessment – assessment not complete until notice of assessment issued – screenshots on ATO Portal did not evidence assessment had been made – placing information on ATO Portal did not constitute giving of notice under s 174 of the Income Tax Assessment Act 1936 (Cth) (ITAA 1936) – the relevant assessment was an original assessment – observations about whether s 170(10) of the ITAA 1936 in any event permitted amendment "at any time" TAXATION – whether agreement to carry out various steps, including a buy-back of shares, constituted an agreement within s 100A of the ITAA 1936 – held that the agreement to carry out the steps was an agreement within s 100A – held that the steps as a whole also constituted an agreement within s 100A – whether agreement entered into in the course of ordinary family or commercial dealing – agreement not entered into in the course of ordinary family or commercial dealing – whether a "reimbursement agreement" must be an agreement which involves an element of "reimbursement" – held that the word "reimbursement" does not limit or control the definition of "reimbursement agreement" – discussion of the operation of s 100A(8) and (9) – whether s 100A(8) requires identification of an "alternative postulate" in a manner similar to s 177C in Part IVA of the ITAA 1936 – danger in construing s 100A by reference to Part IVA – meaning of "parties to the agreement" in s 100A(9) – whether present entitlement of beneficiary arose out of the agreement for the purposes of s 100A(1)(b) – held that s 100A applied TAXATION – construction of s 207-35(6) of the Income Tax Assessment Act 1997 (Cth) (ITAA 1997) – literal terms of s 207-35(6) inconsistent with intended object of the provision – s 207-35(6) construed so as to achieve its intended object STATUTORY INTERPRETATION – construction of s 207-35(6) which appears to contain a drafting error – application of four conditions mentioned in Taylor v Owners – Strata Plan No 11564 [2014] HCA 9; 253 CLR 531 – four conditions treated as prerequisites for correction of error, but not necessarily sufficient – provision construed to give effect to statutory object TAXATION – whether share buy-back purchase price paid to trustee was "made as part of a dividend stripping operation" within the meaning of s 207-155 of the ITAA 1997 – meaning of "dividend stripping operation" in s 207-155 – held that payment fell within the first and second limbs of s 207-155.