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The Federal Court (Dowsett J) has dismissed the taxpayer's appeal from the decision of the Commissioner to disallow a deduction for carried forward losses totalling $13,372,139. The ownership and control of the taxpayer changed relevantly during the income year in question, and the Court held that the taxpayer had failed to satisfy the same business test. Prior to the change of ownership, the taxpayer carried on business through a joint venture. In the income year in question, it disposed of its interest in the joint venture. The Court said, at para 45: "However, in the present case, there can be little doubt that continuation of the business conducted prior to 25 March 1998 was dependent upon retention of the applicant’s interest in the joint venture. Once that was sold, there was no business." Coal Developments (German Creek) Pty Limited ACN 009 974 896 v FCT [2007] FCA 1324 (Federal Court, Dowsett J, 28 August 2007).

For a copy of the decision, go here

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