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Feb. 9, 2012, 9:12 p.m. EST

James Hardie wins Australia tax case

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By Ross Kelly

--High Court dismisses ATO request for appeal

--Company owed A$248M, plus interest, court costs

--Shares outperform

(Adds shares, background)

SYDNEY (MarketWatch) -- James Hardie Industries SE. emerged triumphant Friday from a long-running dispute with Australian authorities over its tax bill.

The Australian Taxation Office now owes the building materials company more than A$300 million after the High Court denied the authority's request for an appeal hearing.

The tax office in 2010 won the first bout in the Federal Court, but that decision was overturned on appeal by the court's full bench last year. Shares in James Hardie, which booked a net loss of US$347 million for the year to March 31, are outperforming the broader market.

The ongoing feud had exacerbated uncertainty for investors in James Hardie, already rocked by a steep downturn in the U.S. housing market. The biggest seller of home siding in the U.S. has undergone a major restructure and changed its headquarters several times as it attempts to deal with compensation obligations to victims of asbestos-related illnesses incurred at its Australian asbestos plants.

The ATO had claimed that James Hardie avoided paying capital gains tax through the restructure.

At 0053 GMT, its shares were trading up 1.1% in Sydney, outperforming a 0.4% decline in the wider market, but were down 0.3% as of 0143 GMT, when the benchmark S&P/ASX 200 Index was 0.6% lower.

The company said the ATO is obliged to refund A$248 million plus interest estimated by James Hardie at about A$63 million, plus legal costs. If the money is received before March 31, the company said it will contribute 35% to the Asbestos Injuries Compensation Fund.

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