Commonwealth Consolidated Acts Commonwealth Consolidated Acts(1) The Commissioner may disallow deductions of a company (or parts of them) for an income year if:
(a) the company has * derived assessable income, or a * capital gain accrued to the company, some or all of which (the injected amount ) would not have been derived, or would not have accrued, if the company did not have those deductions; and
(b) the income was derived, or the capital gain accrued, in that income year.
The disallowed deductions and parts of deductions may exceed the * injected amount.
Note: The disallowance may result in a tax loss for the income year. See section 175 - 35.
(2) The Commissioner cannot disallow the deductions or parts of the deductions if the * continuing shareholders will benefit from the derivation of the * injected amount to an extent that the Commissioner thinks fair and reasonable having regard to their respective * shareholding interests in the company.
Note: Section 175 - 100 allows the Commissioner to disallow the whole or part of any deductions of an insolvent company.
(3) The continuing shareholders are the individuals who had * shareholding interests in the company both immediately before the * injected amount was * derived, and immediately afterwards.