Woolcombers (WA) Pty Ltd v Commissioner of Taxation [1996] FCA 287

Woolcombers (WA) Pty Ltd v Commissioner of Taxation [1996] FCA 287

The loss company, GHMA, did incur a deemed loss in the 1985 loss year. The Commissioner's complaint was not that the loss had not been incurred, but that the incurred losses had been exhausted by deductions, taxable income and transfers. Subsection 80G(15) did not authorise the Commissioner to ignore s 170 in those circumstances. Because the taxpayer had made full and true disclosure, subs 170(3) barred the amendment made more than 3 years after the original assessment became due and payable.

Jurisdiction
Australia
Judgment Date
26 April 1996
Procedural Posture
Income Tax Appeal Concerning Amended Assessment and Transfer of Loss Within a Company Group / Appeal From a Single Judge of the Federal Court Dismissing the Taxpayer's Application to Set Aside the Commissioner's Objection Decision
Outcome
Appeal allowed; amended assessment set aside; respondent ordered to pay the appellant's costs of the appeal and in the court below.
Legal Topics
['income Tax' 'amended Assessment' 'transfer of Losses Within Company Group' 'time Limits for Amendment of Assessments' 'full and True Disclosure']
['taxation Law'] ['income Tax' 'amended Assessment' 'transfer of Losses Within Company Group' 'time Limits for Amendment of Assessments' 'full and True Disclosure']

Case Brief

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Procedural Posture

Income Tax Appeal Concerning Amended Assessment and Transfer of Loss Within a Company Group / Appeal From a Single Judge of the Federal Court Dismissing the Taxpayer's Application to Set Aside the Commissioner's Objection Decision

Legal Issues

  1. 1 ["Whether the Commissioner was entitled under subs 80G(15) of the Income Tax Assessment Act 1936 (Cth) to amend the taxpayer's 1986 assessment after the expiration of the 3 year period referred to in subs 170(3)." 'Whether par 80G(15)(b) applies where the loss company did incur a deemed loss but that loss had been exhausted or was not available for transfer.' "Whether the amended assessment disallowing the taxpayer's claimed transferred loss of $250,000 was valid."]

Ratio Decidendi

The loss company, GHMA, did incur a deemed loss in the 1985 loss year. The Commissioner's complaint was not that the loss had not been incurred, but that the incurred losses had been exhausted by deductions, taxable income and transfers. Subsection 80G(15) did not authorise the Commissioner to ignore s 170 in those circumstances. Because the taxpayer had made full and true disclosure, subs 170(3) barred the amendment made more than 3 years after the original assessment became due and payable.

Court Disposition

Appeal allowed; amended assessment set aside; respondent ordered to pay the appellant's costs of the appeal and in the court below.

Orders

  • ['The appeal be allowed.' 'The amended assessment be set aside.' "The respondent pay the appellant's costs of the appeal and in the court below."]