Dampier Mining Company Ltd v The Commissioner of Taxation of the Commonwealth of Australia [1979] FCA 93

Dampier Mining Company Ltd v The Commissioner of Taxation of the Commonwealth of Australia [1979] FCA 93

The taxpayer's entitlement to deductions under the Income Tax Assessment Act 1936, Part III Divisions 10 and 10AAA, and s.88(2), was barred because all relevant capital expenditure was reimbursed by the Port Hedland Port Authority and such reimbursement was not included in assessable income. Further, the leased seabed was not used by the taxpayer for the purpose of producing assessable income; the use of navigational aids and dredged channel did not constitute such use under the statutory provisions and relevant case law, notably Goldsworthy Mining Limited v Federal Commissioner of Taxation.

Parties
Appellant (respondent): Dampier Mining Company Limited; Respondent (appellant): The Commissioner of Taxation of the Commonwealth of Australia
Jurisdiction
Australia
Judgment Date
11 September 1979
Procedural Posture
Appeal / Final Judgment
Outcome
appeal dismissed; cross appeal allowed
Legal Topics
Income Tax, Allowable Deductions, Mining Leases, Reimbursement of Capital Expenditure, Port Facilities, Improvements to Land
Tax Law Income Tax Allowable Deductions Mining Leases Reimbursement of Capital Expenditure Port Facilities Improvements to Land

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Parties

Dampier Mining Company Limited

Appellant (respondent)

The Commissioner of Taxation of the Commonwealth of Australia

Respondent (appellant)

Procedural Posture

Appeal / Final Judgment

Legal Issues

  1. 1 Whether expenditure incurred by a lessee for dredging and improvements to leased harbour land is deductible under the Income Tax Assessment Act 1936, specifically Part III Divisions 10 and 10AAA and s.88(2).
  2. 2 Whether reimbursement of capital expenditure by the Port Hedland Port Authority bars claims for deductions under Divisions 10 and 10AAA.
  3. 3 Whether the land leased (seabed and associated space) was 'used for the purpose of producing assessable income' within s.88(2).

Ratio Decidendi

The taxpayer's entitlement to deductions under the Income Tax Assessment Act 1936, Part III Divisions 10 and 10AAA, and s.88(2), was barred because all relevant capital expenditure was reimbursed by the Port Hedland Port Authority and such reimbursement was not included in assessable income. Further, the leased seabed was not used by the taxpayer for the purpose of producing assessable income; the use of navigational aids and dredged channel did not constitute such use under the statutory provisions and relevant case law, notably Goldsworthy Mining Limited v Federal Commissioner of Taxation.

Court Disposition

appeal dismissed; cross appeal allowed

Orders

  • The appeal by Dampier Mining Company Limited is dismissed.
  • The appellant (Dampier Mining Company Limited) is to pay the respondent's (Commissioner of Taxation) costs of this appeal.