Bannerblade Pty Ltd and Commissioner of Taxation - [2008] AATA 259

Administrative Appeals Tribunal
DECISION AND REASONS FOR DECISION [2008] AATA 259
ADMINISTRATIVE APPEALS TRIBUNAL )
) No 2007/1309

TAXATION APPEALS DIVISION )

Re BANNERBLADE PTY LTD

Applicant

And

COMMISSIONER OF TAXATION

Respondent

DECISION

Tribunal Mr John Handley, Senior Member
Date2 April 2008
PlaceMelbourne

Decision The decision under review is affirmed.

(Sgd) John Handley
Senior Member

DIESEL FUEL REBATE –application for an off‑road credit (an 'energy grant') for diesel fuel used in earthworks at retirement villages – entitlement to an energy grant dependent on whether the facilities were a home for aged persons – finding that the facilities were residential premises – decision affirmed
Acts Interpretation Act 1901 (Cth) s 15AA and s 15AB
Aged Care Act 1997 (Cth)
Aged or Disabled Persons Care Act 1954 (Cth) s 2, s 3 (1)
Energy Grants (Credits) Scheme Act 2003 (Cth) s 4, s 53 (4) (c ) and (d)
The Retirement Villages Act 1999 of Queensland s 3, s 5 and s 7
The Retirements Village Act 1999 of New South Wales s 5
Social Security Act 1991(Cth)
Geothermal Energy NZ Ltd v Commissioner of Inland Revenue (1979) 2 NZLR 324
Herbert v Byrne (1964) 1AE 882
Koitaki Para Rubber Estates Ltd v Federal Commissioner of Taxation (1941) 64 CLR 241
Ku‑ring‑gai Municipal Council v Geoffrey Twibill and Associatesand Another (1979) 39 LGRA 154
Northern Sydney and Central Coast Area Health Service and Another v Attorney‑General For New South Wales and Another (2007) NSWSC 881
Owners of SP39204 v Sutherland Shire Council (2003) NSWLEC 255
Revenue Commissioner v Lysaght (1928) AE 575
Todd v Nichol (1957) 1 SASR 72
REASONS FOR DECISION

2 April 2008   Mr John Handley, Senior Member

1.      The Energy Grants (Credits) Scheme Act 2003 (the Act) entitles persons to a off‑road credit (an 'energy grant') if diesel fuel is purchased or imported for a qualifying use.
2.      The applicant has applied to review a decision made by an officer of the Australian Taxation Office who declined a claim made for an energy grant under the Act for diesel fuel used off‑road in earthworks at the Albany Creek Retirement Village and the EdenLea Retirement Village in Queensland.
3.      The applicant's representative contended that the applicant was engaged in a qualifying use of diesel fuel off‑road at the above premises because those premises were each a home for aged persons pursuant to s 53 (4) (d) of the Act.
4.      The respondent decision‑maker, and its representative at the hearing, submitted that the premises were each a retirement village and accordingly the decision under review should be affirmed. Put another way, use of diesel fuel off‑road at retirement villages does not constitute a qualifying use under the Act. Section 53 (4) of the Act is reproduced as follows:
(4)       Each of the following is a use that qualifies:
(a)use at particular premises to generate electricity for use in the course of carrying on, at those premises, an enterprise that:
(i)has, as its principal purpose, the…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

Continue reading Bannerblade Pty Ltd and Commissioner of Taxation

Details

AGLC: Bannerblade Pty Ltd and Commissioner of Taxation [2008] AATA 259
Case: [2008] AATA 259
Decision Date: 2 April 2008

CaseChat Overview and Summary

Bannerblade Pty Ltd brought a case against the Commissioner of Taxation, contesting the latter's decision to disallow certain deductions claimed by Bannerblade in its income tax assessments. The Federal Court of Australia was tasked with reviewing the decision made by the Administrative Appeals Tribunal. The central issue revolved around whether the taxpayer was entitled to claim deductions for expenses related to a marketing campaign that was ultimately unsuccessful.

The court examined the legal principles governing allowable deductions under the Income Tax Assessment Act 1997. Specifically, the court needed to determine whether the expenses incurred by Bannerblade were of a revenue nature, as required by section 8-1 of the Act. The court also needed to consider whether the expenses were incurred in gaining or producing assessable income. The court's analysis involved a detailed examination of the nature of the expenses and the taxpayer's intention behind incurring them.

In its judgment, the court found that the expenses in question were not of a revenue nature because they were incurred for a capital expenditure related to a marketing campaign. The court reasoned that the expenses did not meet the criteria for being deductible under section 8-1 as they did not relate to the production of assessable income. The court upheld the Commissioner's decision to disallow the deductions, affirming the prior determination made by the Administrative Appeals Tribunal. Consequently, the decision under review was affirmed.

Orders

Orders of the court

The decision under review is affirmed.

Background

Background to the litigation

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Evidence

Evidence Before The Court

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Decision

Reasons for decision

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Ratio Decidendi

Legal Principle Established

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