HI6028 Taxation Law: Arthur Murray Case and RIP Pty Ltd's Tax Implications

HI6028 TAXATION LAW
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Contents
Part A....................................................................................................................................................3
Part B.....................................................................................................................................................7
References...........................................................................................................................................10
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Part A
(a) Arthur Murray (NSW) Pty Ltd v FCT (1965)114 CLR 314.
The choice in the Arthur Murray Pty Ltd V FCT case law is all about the significance of the
revenue derived by a taxpayer and that gets taxable in Australia. The facts, conclusion, and
issues of the case are discussed as follows:
Information about the situation when Arthur Murray (NSW) Pty Ltd is the taxpayer in this
instance, that is a registered organization of United States. The company is interested in the
company of offering dance lessons to the pupils across Melbourne and Sydney in Australia.
The contractual plans of the company are so that the pupils have to pay for 1200 lessons
throughout the lifetime with 5, 10 or maybe 15-hour lessons spread throughout the entire year
in total or considerably during the time of entering into the agreement. Additionally, the
contract wasn't cancellable. However, refunds were created by the organization for
satisfactory explanations by pupils. The company utilized to make its accounts with the
accrual approach of accounting where the sophisticated transaction for contracts wasn't
captured as earnings in time of getting the transaction instead of having been constituted as
income at the conclusion of the weeks in corresponding to the number of courses offered
throughout the month. He prior quantity was captured as unearned deposit in time of receipt.
The Commissioner of Taxation provided the total amount received in the revenue instead of
gained deposits included by the business. On the objection created by the taxpayer the case
was reported to Board for evaluation and also the Board additionally supported the
assessments made by the Commissioner. The taxpayer then appealed to the High Court of
Australia. The issue before the court was if the commissioner was justified in managing the
quantities in fact obtained by the taxpayer as assessable earnings regardless of whether the
dance courses have been supplied by the organization to the pupils or otherwise (Barwick,
2017), et.al.
Problems
The problems that are associated with the case are the variations in the Australian taxation
program as well as US taxation system. Under the Australian legislation, the tax is required
on the taxable income come after deducting the allowable deductions from the assessable
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