Elders wins latest round of tax battle in Federal Court

The Commissioner of Taxation yesterday failed to overturn a court decision in favour of Futuris Corporation, now known as Elders.

The full court of the Federal Court of Australia dismissed an appeal by the commissioner against an earlier decision by a single judge in August 2010.

The commissioner has 28 days to decide whether to appeal to the High Court.

The case involves an amended tax assessment issued by the ATO in 2004 over the sale of Futuris' building products division in October 1997. The amended assessment added $82.95 million to Futuris' assessable income, to which the company objected.

The single judge of the Federal Court allowed the objection and excluded the $82.95 million from taxable income, prompting the appeal to the full court.

Elders said in a statement yesterday that the decision upheld its objections against the amended assessments.

"Should the ATO not appeal or special leave is not granted by the High Court, Elders anticipates receipt of cash of $38.5 million by way of refund of prepaid tax, penalties and interest of $27.6 million and interest on that prepayment currently estimated to be $10.9 million," Elders said. The company said it would receive a $65 million profit and loss benefit after tax.

If the ATO applies for leave to appeal to the High Court, Elders said it would continue its policy of making provision for a liability while defending its position.

After a trading halt was lifted, Elders shares closed up 3?, or 14.29 per cent, at 24?.