- in not identifying all assets disposed of by one of the taxpayer companies and another party (an individual) when the CSIRO paid the sum of $8,835,083 to them in full settlement of potential claims that they may have had against the CSIRO; and
- in not determining how much of the sum of $8,835,083 was reasonably attributable to disposals of assets by the taxpayer company.
The Commissioner had argued that the amount that the parties had attributed to disposals by the taxpayer company had been reduced by a sham agreement with the result that the whole of the amount of $8,835,083 had been derived by the taxpayer company as an assessable capital gain, with none derived by the individual. The Court rejected the Commissioner's proposition that because the agreement was a sham, it followed that no part of the amount received was attributable to assets disposed of by the individual.
The Court remitted the matter to the AAT to be determined according to law: Gerard Cassegrain & Co Pty Ltd v FCT  FCA 415 (Federal Court, Lindgren J, 23 March 2007).
For a copy of the decision, go here