Coles Myer Finance Ltd v The Commissioner of Taxation

The High Court of Australia heard an appeal by Coles Myer Finance Limited against the Commissioner of Taxation. The dispute concerned whether certain amounts constituted deductible losses or outgoings under section 51(1) of the Income Tax Assessment Act 1936 for the income years ended 30 June 1984 and 30 June 1985.

The legal issues before the High Court were whether specific sums of money, namely $2,375,579 and $2,359,893, were deductible losses or outgoings incurred by Coles Myer Finance Limited in the relevant income years, and if so, to what extent each year was affected.

The High Court allowed the appeal, setting aside the orders of the Full Court of the Federal Court. The Court answered the questions posed in the special case, determining that parts of the amounts in question constituted deductible losses or outgoings. Specifically, for the first amount, $538,460 was deductible in the 1984 income year and $1,837,119 in the 1985 income year. For the second amount, $1,618,805 was deductible in the 1984 income year and $741,088 in the 1985 income year. The Commissioner of Taxation was ordered to pay Coles Myer Finance Limited's costs in the special case in the Federal Court.