TAXATION APPEALS

Press, Volume C, Issue 29508, 9 May 1961, Page 15

TAXATION APPEALS

Australian Firms Lose

(N.Z Press Assn— Copyright) SYDNEY, May 8.

Two Australian oil companies in the High Court today lost taxation appeals for amounts totalling £A463.941.

The firms are B.P. (Australia). Ltd., and Vacuum Oil Co., Pty.. Ltd., which, claimed the commissioner of taxation, wrongly disallowed deductions from their taxable income.

In reserved judgments. Mr Justice Taylor said the question was if the deductions claimed were rightly disallowed on the ground that the expenditure over onebrand petrol stations was of a capital nature. He said by disallowing some deductions which had been claimed as taxable income, 8.P., Ltd.’s taxable income for the year ended June 30. 1952, was increased by £A271.240. Similarly. Vacuum Oil’s taxable income for the year ended June 30, 1953. was increased by £A192.701.

These amounts were claimed to have been spent on sites for the exclusive sale of their products, installation of new plant and building alterations. The Judge said the companies claimed circumstances of the trade made the payments ordinary incidents of their business.

They claimed they constituted ordinary marketing costs which were attributable to the company’s trading accounts. He was of the opinion that the amoun’s paid were capital outgoings for the purpose of obtaining the resulted advantage.