Timberlake, M. v Consultech Australia Pty Ltd

Re: LILYDALE PASTORAL CO. PTY. LTD.
And: COMMISSIONER OF TAXATION
No. QLD G154 of 1986
Income Tax

COURT

IN THE FEDERAL COURT OF AUSTRALIA

QUEENSLAND DISTRICT REGISTRY
GENERAL DIVISION
Pincus J.

CATCHWORDS

Income Tax - Withholding tax - interest on loan from overseas - certificate of exemption refused - whether use by borrower or by end user must be qualifying use - divisibility of loan into several disbursements - whether "receipt by borrower" includes receipt on borrower's behalf - whether application of moneys to discharge loan to buy rental-producing realty qualifies.

Words and Phrases - "undertaking" "receipt ... by a borrower"

Income Tax Assessment Act 1936 ss. 128A, 128G, 128H

Taxation Boards of REview (Transfer of Jurisdiction) Act 1986, ss. 223, 224.

HEARING

BRISBANE

#DATE 26:3:1987

Solicitors for the Applicant: Lees Marshall & Warnick

Counsel for the Respondent: Mr. Ulrick

Solicitors for the Respondent: Australian Government Solicitor

ORDER

The appeal be allowed;

The respondent pay the applicant's costs of and incidental to the appeal, limited to one day of hearing;

The matter be remitted to the respondent with a direction to issue to the applicant a certificate complying with s.128H(2) of the Income Tax Assessment Act 1936 in respect of each of the two payments (of $432,195.30 and $1,244,346.26 respectively) referred to in the reasons for judgment.

NOTE: Settlement and entry of orders is dealt with in

Order 36 of the Federal Court Rules.

JUDGE1

This is an appeal from the Administrative Appeals Tribunal in a taxation matter. The case was heard by a Board of Review, on reference from the respondent, in April 1986, but decided on 29 September 1986, and is therefore caught by the provisions of the Taxation Boards of Review (Transfer of Jurisdiction) Act 1986. Under s.223 of that Act, the proceedings on the reference, with effect from 1 July 1986, continued before the Administrative Appeals Tribunal and under s.224 the person requesting the review has "... subject to sub-section (2), instead of the right of appeal provided for by the Administrative Appeals Tribunal Act 1975, the same right of appeal that the person would have had if this Act had not been passed."

1. Had the 1986 Act just mentioned not been passed, there would have been a right of appeal from the Board of Review under s.196 of the Income Tax Assessment Act 1936, from any decision involving a question of law. That appeal would have lain to a Supreme Court, but by virtue of s.224(2) of the 1986 Act I have mentioned, the appeal now lies to this Court.

2. Because the appellant had the same right of appeal as there would formerly have been to a Supreme Court, the questions which may be agitated in the appeal are not confined to questions of law: Ruhamah Property Co. Ltd. v. Federal Commissioner of Taxation (1928) 41 CLR 148. The whole decision of the Tribunal is open to review (p.151). Each side during the course of argument attacked findings made by the Tribunal, but neither…