bbi vs. ato, page-4

If they succeed in selling DBCT, it may be irrelevant in any case what the ATO decides (apart from potential penalty fees if it goes in the ATO's favour).

If the expenses were not deductible in the years they were incurred, they will be added to the cost base of DBCT and reduce the capital gains tax that will be owing on profit from the sale.

I may be wrong, but apart from penalties imposed, the net effect will be the same with regards to the tax liability.

Actually I think I am not right on that opinion.

If the ATO rules against BBI and assuming that BBI was profitable in the years that they had claimed the disputed deduction (or would have been profitable but for that deduction), then BBI ends up owing the ATO the disputed amount (and I think that ranks ahead of other lenders).

However, adding that amount to the cost base of DBCT doesn't help BBI if they are currently in a loss situation, as they won't be paying tax on the profits (e.g. losses) in any case. It will eventually reduce their tax burden should they return to profitability.

I would need to spend some time analysing their figures to get a clearer picture.