Cleary & Cleary

In *Cleary & Cleary*, the parties were the applicants, Cleary & Cleary, and the respondent, the Commissioner of Taxation. The dispute concerned the Commissioner's assessment of income tax against Cleary & Cleary for the 2017 income year. The matter came before Moss J of the Federal Court of Australia.

The primary legal issue before the court was whether the Commissioner had correctly determined that certain amounts received by Cleary & Cleary constituted assessable income. Specifically, the court was required to consider the nature of these receipts and whether they fell within the definition of income under the *Income Tax Assessment Act 1997* (Cth).

Moss J reasoned that the character of the receipts was determinative of their taxability. Applying established principles of income tax law, his Honour examined the source and nature of the funds received by Cleary & Cleary, considering whether they represented a profit or gain derived from a business operation or an isolated transaction that had the character of a business. The court considered the intention of the parties and the circumstances surrounding the transactions to ascertain whether the receipts were of a capital or revenue nature.

The court found that the amounts in question were revenue in nature and therefore assessable as income. Consequently, Moss J dismissed the application and affirmed the Commissioner's assessment.