TAXATION LAW: A CASE STUDY ON FCT VS. CITYLINK MELBOURNE LTD  HCA 35
Q2: FCT vs. Citylink Melbourne Ltd  HCA 35
The case in FCT v Citylink Melbourne Ltd  is build on the law regarding general business income deductions under the Australian taxation law which is based on the Income Tax Assessment Act. The law involved a case between the Federal Commissioner of Taxation and Citylink Melbourne Limited over matters related to annual concession fees (in respect to the Concession Deed which entered between the State and the Company which granted certain rights to the company for the contract period) which were payable by the Citylink to the State government. The case was heard in 20thh July 2006 at the High Court of Australia. Basically, the law falls under section 8(1) of the Income Tax Assessment Act regarding the general provision for income deductions. In similar to other cases like Arthur Murray and J Rowe & Son, the case raises the question on when income is supposed to be recognized for taxation and how deduction are to be allocated to their respective years of income (timing of Citylink’s deductions) . The above case stipulates that a practical approach followed in determination of the question raised regarding whether an outgoing or a loss has been incurred instead of following strict juridical procedures. Likewise, the case validates that the preferable principles are applicable in other situations outside financial transactions. Generally, the high court held that the annual concessions were supposed to be paid (deductable) by the Citylink limited to the Australian state as they accrue. The following points can be inferred in support of the Commissioner’s arguments regarding the above case. (i) A critical analysis of the above case reveals that the concession fees were incurred during the relevant company’s years of income and therefore...
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