National Australia Bank won a pyrrhic victory yesterday when it concluded a long-running battle with the Australian Taxation Office over the tax treatment of a funding instrument it issued back in 1997.The bank announced that it would get a refund of "some amounts" paid in relation to an issue of exchangeable capital units - ExCaps. The statement said: "Under the agreement, NAB's tax assessments for the years 1997 to 2007 are reduced, resulting in the reduction of approximately $142 million in tax, subject to final interest and other adjustments."The ATO had assessed tax of $570 million owing on an interest deduction claimed by NAB in relation to the hybrid securities.In 2009, the bank reported that it had paid half the amount. Later that year it went to court to have the tax ruling overturned.The settlement reached yesterday reduces the tax by about $142 million. NAB will receive a refund on the tax already paid.In the wash-up, the bank is out of pocket by about $150 million on tax it argued it should never have had to pay.