Ball v Commissioner of Taxation (Cth) [1984] HCA 71

Ball v Commissioner of Taxation (Cth) [1984] HCA 71

The appeal failed because s 44(2D)(b) makes the purpose of the agreement or arrangement, not the purpose of each step or the share issue itself, the critical factor, and because the subsection applies to all shares issued in pursuance of the relevant agreement or arrangement without permitting the proposed limitation to shares matching the amount paid, transferred or applied to the taxpayer.

Jurisdiction
Australia
Procedural Posture
Tax Appeal / Appeal to the High Court From a Judgment of the Full Court of the Federal Court
Outcome
Appeal dismissed.
Legal Topics
['income Tax' 'statutory Interpretation' 'bonus Shares' 'redeemable Shares' 'section 44(2 D)(b) of the Income Tax Assessment Act 1936 1973 (cth)']
['taxation Law'] ['income Tax' 'statutory Interpretation' 'bonus Shares' 'redeemable Shares' 'section 44(2 D)(b) of the Income Tax Assessment Act 1936 1973 (cth)']

Case Brief

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Procedural Posture

Tax Appeal / Appeal to the High Court From a Judgment of the Full Court of the Federal Court

Legal Issues

  1. 1 ['Whether the Full Court of the Federal Court misapplied FCT v Lutovi Investments Pty Ltd (1978) 9 ATR 351; 140 CLR 434.' 'Whether all material parts of an agreement or arrangement referred to in s 44(2D)(b), including the issue of shares, must have the purpose of enabling the company to make a payment, transfer or application by one of the stated means.' 'Whether, when s 44(2D)(b) is applied to an issue of bonus shares in pursuance of, or as part of, a relevant agreement or arrangement, only shares of no greater value than the amount paid, transferred or applied to the taxpayer should be deemed redeemable shares.']

Ratio Decidendi

The appeal failed because s 44(2D)(b) makes the purpose of the agreement or arrangement, not the purpose of each step or the share issue itself, the critical factor, and because the subsection applies to all shares issued in pursuance of the relevant agreement or arrangement without permitting the proposed limitation to shares matching the amount paid, transferred or applied to the taxpayer.

Court Disposition

Appeal dismissed.

Orders

  • ['The appeal is dismissed.']