Sample Assignment on Taxation Law docs
Added on 2021-06-16
14 Pages3404 Words25 Views
Finance
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Running head: TAXATIONTaxationName of the Student:Name of the University:Author Note:
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2TAXATIONTable of ContentsPart A.........................................................................................................................................2Question 1..................................................................................................................................2Arthur Murray (NSW) Pty Ltd V FCT (1965) 114 CLR 314....................................................2Facts of the case.........................................................................................................................2Issues of the case........................................................................................................................4Conclusion of the case...............................................................................................................4a).................................................................................................................................................5(i)................................................................................................................................................5(ii)...............................................................................................................................................5(b)...............................................................................................................................................7c..................................................................................................................................................7Question ii..................................................................................................................................8Part B..........................................................................................................................................9Question i...................................................................................................................................9Question ii................................................................................................................................10Question iii...............................................................................................................................10References and Bibliography...................................................................................................11
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3TAXATIONPart A Question 1Arthur Murray (NSW) Pty Ltd V FCT (1965) 114 CLR 314Facts of the case In this particular case, it has been found out that the taxpayer was engaged inconducting the business where he was providing dancing lessons as well as even offereddiscounts to the students who used to pay fees in advance (Vann 2014). In addition to that,the discount was made available to the student so that they feel encouraged to pay the fees inadvance. However, the agreement was done between the taxpayer as well as students where itwas already declared that there would be no refund initiated for the prepaid tuition fees. Insuch case, the taxpayer transferred the fees that he received in the advance into the suspenseaccount and that was treated by the taxpayer as unearned deposit untaught lessons accounts.Furthermore, after providing dance lessons to the student, the taxpayer got involved intransferring the relevant fees from suspense account to revenue account. Therefore, based onthe agreement, it can be seen that there was no need for the taxpayer to refund the prepaidtuition fees in actual practice, but the taxpayer had refunded the fees of the students based onthe uncompleted lessons (Shetreet and Turenne 2013). Here, the taxpayer treats the prepaid tuition fees as income derived and this was doneafter the dancing lessons that was completely provided to the students (Saad 2014). Inaddition to that, there was no inclusion of prepaid tuition fees in the assessable income of thetaxpayer. However, at the time of calculating the assessable income, it was noted that feeswere included for which tuition was already conducted for a given year. Therefore, theCommissioner of Tax actually was involved in calculating the assessable income on receipt
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4TAXATIONbasis as well as included the prepaid tuition fees as ordinary income under Section 25 (1) ofthe ITA Act 1197.
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