Assignment | Income Tax Assessment Act 1997
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Added on 2020-04-01
Assignment | Income Tax Assessment Act 1997
Added on 2020-04-01
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Running head: TAXATION LAWTaxation LawName of the Student:Name of the University:Author’s Note:Course ID:
1TAXATION LAWTable of ContentsAnswer to Question 1:.....................................................................................................................2Answer to Question 2:.....................................................................................................................3Answer to Question 3:.....................................................................................................................6Answer to Question 4:.....................................................................................................................9References:....................................................................................................................................12
2TAXATION LAWAnswer to Question 1:“Section 4-15 of the Income Tax Assessment Act 1997” states that in order to calculatetaxable income, the allowable expenses are deducted from assessable income. In addition, ataxpayer is allowed in claiming deduction under “Section 8-1(1) of the ITAA 1997” forexpenditures incurred on gaining or developing assessable income along with conducting theactivities associated with the businesses1. Hence, the following points are discussed briefly asfollows:1)According to “Section 8-1”, the amount spent on moving a machinery would be takeninto account for deduction only, if the machinery is utilised in earning an income, whichis taxable. In case of “Granite Supply Association Ltd v Kitton(1905)and Smith vWestinghouse Brake Company(1888)”, the sum of money incurred for relocatingexpenses and plant would not be allowed as deduction due to the capital nature of theexpenditures. 2)“Section 8-1 of ITAA 1997” denotes that the cost of revaluation related to an asset is notconsidered as deductible expense2.3)“Section 8-1 of ITAA 1997” represents that any expenditure related to lawful suits issuffered in contrast to the closure of the company and this would be taken into account inthe form of deductible expenditure3. 1Caldwell, R,Taxation for Australian businesses. in .2Morgan, A, C Mortimer, & D Pinto,A practical introduction to Australian taxation law. in .
3TAXATION LAW4)As laid out in “Section 8-1 of ITAA 1997”, in order to assure business income, with priorexperience of solicitor expense, it would be considered in the form of permissiblededuction4. Answer to Question 2:If a business organisation makes any purchase, the input credit of GST is permitted only,in case; pertinent documents are stored properly in association with such transactions. Accordingto “GST Act 1999”, any organisation intending to make business income possesses the right toobtain credit of input for payments related to GST involving material or asset purchase5. Issue:It has been identified from the provided case that Big Bank Limited has incurredadvertisement expenditure of $1,650,000 that includes GST as well. In the current scenario, thebank intends to assure that the overall expenditures related to advertisement would be permittedas credit of input or not, as the expenditures include GST6.3Woellner, R, S Barkoczy, S Murphy, C Evans, & D Pinto,Australian taxation law select 2014.in .4Kenny, P,Australian tax 2013. in , Chatswood, N.S.W., LexisNexis Butterworths, 2013.5Woellner, R, R Woellner, S Barkoczy, S Murphy, C Evans, & D Pinto,Australian TaxationLaw 2015. in .6Krever, R,Australian taxation law cases 2013. in , Pyrmont, N.S.W., Thomson Reuters, 2013.
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