Aus Geo Case Study

Better Essays
Rahul Ramesh Bajaj | 18178738 | Wednesday 13:00
− All necessary factors need to be considered, also all the necessary facts need to be considered from cases need to be undertaken. So that a legal legitimate advice is provided to the client of the provisions of the Income Tax Assessment Act. As in this case the correct advice need to be provided to AUSGeo. An accounting year starts on 1st July to the 30th June of the next year in the Commonwealth of Australia, for the purpose of tax assessment. All transactions that have taken place during this relevant year need to be considered and recorded in accordance with the ITAA97 . In regard to the business conducted by AUSGeo the question that arises is that the nature of income received is of statutory or capital as it has been noticed that the contract between AUSGeo and U-Trains was terminated and in result of that AUSGeo received a compensation. Usually a compensation received in relation to regular business affairs is considered to be of income in nature as in the case of HEAVY MINERALS (1966) and ALLIED MINERALS (1989) where in the termination of the contracts did not affect the company in regard to its business and hence this income is assessable under s6-5 or 15-30 ITAA97. But if the same compensation is paid if there is a damage to the profit
…show more content…
Though this was done in an enterprising manner wherein it got linked to the business, its been made clear it has nothing to do with the actual business of AUSGeo. The same has been supported by the principles of SCOTTISH AUSTRALIAN MINING and WESTFIELD, wherein it has been made clear in the above mentioned cases that the taxpayer was merely offsetting his asset in the best manner possible without constituting to a profit making
Get Access