BHP Billiton Petroleum (Bass Strait) Pty Ltd v Commissioner of Taxation

[2002] FCAFC 433

Full Court of the Federal Court

Built by Barristers,
For Australian Law.

See how it works

Interrogate

Catchwords

1. Taxation
2. › Income Tax
3. › Assessable income
4. › Derivation of income
5. › Accruals basis
6. › Sale of commodities
7. › Bona fide dispute as to consideration
8. › Whether income derived at delivery or when dispute resolved
9. › Income Tax Assessment Act 1936 (Cth), s 25(1)
1. Taxation
2. › Petroleum Resource Rent Tax
3. › Assessable petroleum receipts
4. › Consideration receivable
5. › Bona fide dispute as to pass-on amounts
6. › Whether consideration receivable at delivery or when dispute resolved
7. › Petroleum Resource Rent Tax Assessment Act 1987 (Cth), s 24
1. Taxation
2. › Income Tax
3. › Derivation of income
4. › Role of accounting evidence and business practice
5. › Whether accounting principles determinative or persuasive
6. › Significance of expert accounting evidence
1. Arbitration
2. › Commercial arbitration
3. › Arbitration clause in supply contract
4. › Whether arbitration a condition precedent to recoverable debt
5. › Commercial Arbitration Act 1984 (Vic)

Quick Take

Where part of the consideration for the sale of goods or commodities is the subject of a bona fide dispute between buyer and seller, the disputed amount is not derived as income for the purposes of s 25(1) of the Income Tax Assessment Act 1936 (Cth) until the dispute is resolved by arbitration, litigation or settlement. The same principle applies to 'consideration receivable' under s 24 of the Petroleum Resource Rent Tax Assessment Act 1987 (Cth). Expert accounting evidence as to proper accounting treatment is admissible and highly persuasive on the question of when income is derived. The US 'claim of right' doctrine has not been adopted in Australia and remains an open question.