Federal Commissioner of Taxation v Sun Alliance Investments Pty Ltd (in liq)

HIGH COURT OF AUSTRALIAGLEESON CJ,GUMMOW, KIRBY, CALLINAN AND HEYDON JJCOMMISSIONER OF TAXATION OF THE COMMONWEALTH OF AUSTRALIA  APPELLANTANDSUN ALLIANCE INVESTMENTS PTY LIMITED (IN LIQUIDATION)  RESPONDENTCommissioner of Taxation (Cth) v Sun Alliance Investments Pty Limited (in liquidation) [2005] HCA 7017 November 2005S126/2005ORDER1.Appeal allowed with costs.2. Set aside the orders of the Full Court of the Federal Court dated 9 March 2004 and, in their place, order that the appeal to that Court be dismissed with costs.3.Cross-appeal dismissed with costs.On appeal from the Federal Court of AustraliaRepresentation:G J Davies QC with R L Hamilton and S H Steward for the appellant (instructed by Australian Government Solicitor)B J Shaw QC with M M Gordon SC and M T Flynn for the respondent (instructed by Maddocks)Notice:  This copy of the Court's Reasons for Judgment is subject to formal revision prior to publication in the Commonwealth Law Reports.CATCHWORDS Commissioner of Taxation (Cth) v Sun Alliance Investments Pty Limited (in liquidation)Income tax – Capital gains and losses – Reduced amount of any consideration in respect of the acquisition of an asset – Royal and Sun Alliance Insurance Australia Holdings Limited ("RSA") formed by merger of the Royal Group and the Sun Alliance Group – RSA deemed by operation of s 160ZZS of the Income Tax Assessment Act 1936 (Cth) ("the 1936 Act") to have acquired shares in two wholly owned subsidiaries on date of merger for a consideration equal to the market value of those shares on that date – Reconstructed accounts of subsidiaries showed unrealised...