Commissioner of Taxation v Rozman (No 2) [2010] FCA 387

Commissioner of Taxation v Rozman (No 2) [2010] FCA 387

Section 109C of the Income Tax Assessment Act 1936 (Cth) encompasses payments by direction from a private company to a shareholder, and this interpretation is not prevented or modified by the operation of s 109T (payments through interposed entities) or s 109Y (distributable surplus limits).

Jurisdiction
Australia
Judgment Date
23 April 2010
Procedural Posture
Appeal From the Administrative Appeals Tribunal / Judgment on Reconsideration of Reasons and Final Orders
Outcome
Appeal allowed; cross-appeal allowed in part; decision of the Tribunal set aside and remitted for reconsideration; applicant ordered to pay respondent's costs
Legal Topics
['deemed Dividend' 's 109 C Income Tax Assessment Act 1936 (cth)' 's 109 T Income Tax Assessment Act 1936 (cth)' 'division 7 A' 'payment by Direction' 'interposed Entities' 'distributable Surplus']
['taxation Law'] ['deemed Dividend' 's 109 C Income Tax Assessment Act 1936 (cth)' 's 109 T Income Tax Assessment Act 1936 (cth)' 'division 7 A' 'payment by Direction' 'interposed Entities' 'distributable Surplus']

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Procedural Posture

Appeal From the Administrative Appeals Tribunal / Judgment on Reconsideration of Reasons and Final Orders

Legal Issues

  1. 1 ['Does s 109T Income Tax Assessment Act 1936 (Cth) prevent s 109C from encompassing payments by direction?' 'Whether the construction of s 109C includes payments by direction, and the interaction with s 109T and s 109Y.']

Ratio Decidendi

Section 109C of the Income Tax Assessment Act 1936 (Cth) encompasses payments by direction from a private company to a shareholder, and this interpretation is not prevented or modified by the operation of s 109T (payments through interposed entities) or s 109Y (distributable surplus limits).

Court Disposition

Appeal allowed; cross-appeal allowed in part; decision of the Tribunal set aside and remitted for reconsideration; applicant ordered to pay respondent's costs

Orders

  • ['Appeal allowed.' 'Cross-appeal allowed in part.' 'Set aside the decision made by the Tribunal in proceedings No 1218 of 2007 and remit the matter to the Tribunal to be dealt with conformably with the reasons of this Court.' "The applicant pay the respondent's costs of the appeal and cross-appeal."]