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BULAW 3731 Income Taxation Law & Practice

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INSTRUCTIONS1. See the Instructions and Assessment Criteria in the Course Description and make sure you follow them! 2. Please answer all parts of the question 3. All work presented for assessment in this course must comply with the format outlined in the University's Presentation of Academic Work publication, available from the bookshop or on-line at 4. All essays must be accompanied by a signed official cover sheet ('Plagiarism Declaration Form'), available at and lodged as appropriate for your campus. 5. You MUST reference in the body of the essay every time you use information from other people. This requires you to keep a track of where you are taking information from and then writing t

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FCT v Rowe (1997) 35 ATR 432; 97 ATC 4317

The taxpayer worked as an engineer for Livingstone Shire Council but was suspended in 1985 for some complaints against him. The Queensland Government overruled it and started an inquiry (Pomeranz, 2015). It was proved that the charges were baseless and his legal costs needs to be reimbursed. The Council refused to provide $24,727.99 and dismissed him from work in 1986.

 The taxpayer stated that the amount was actually allowable deductions but the Commissioner included it as assessable income. He took the help of Administrative Appeals Tribunal who stated that the ex gratia payment was not assessable income. It was a deductible payment that cannot be categorized as income within the Sec 25(1). The person in charge of the judgment decided that the ex gratia amount or payment offered to the person in this case was not for his services to the company Livingstone Shire Council (Pomeranz, 2015). They were not some gift that he received. The link between his former employer and ex gratia was that the legal expenses that he suffered from were incurred as he was trying to defend himself when he was wrongfully suspended from work on false accusations.

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