28 Jan 2011
MALLOWDALE ENTERPRISES LIMITED V THE COMMISSIONER OF INLAND REVENUE HC AK CIV 2009-404-6703
- Citation
- openlaw-f4a6e639_1ca8_4db8_8145_48a69401422f.pdf
- Court
- High Court
The Court held the expenditure was revenue (not capital) because the investors' payments had a close nexus to the production's income, were predominantly current in nature, and functioned as circulating capital to generate ticket sales; Volcanic Island acted as agent for the investors in deploying those funds. Therefore the Commissioner erred in disallowing deductions and the assessments cancelling the losses were set aside.