Decision impact statement
Taxpayer and Commissioner of Taxation
Venue: Administrative Appeals Tribunal
Venue Reference No: 2011/2206-2209
Judge Name: SM O'Loughlin
Judgment date: 21 December 2012
Appeals on foot: No
Decision Outcome: Partly Adverse
Impacted Advice
Relevant Rulings/Determinations:- None
- None
Subject References:
Bank deposits
Burden of proof
Penalty payable
 This document is not a public ruling, but provides a statement of the Commissioner's position in relation to the decision and how the law will be administered as a consequence of the decision. Any proposals for changes in the law are matters for government and it is not appropriate for the Commissioner to comment. |
Précis
Outlines the ATO's response to this case, which concerned whether the taxpayers have discharged the burden of proving that their income tax and penalty assessments were excessive.
Brief summary of facts
In July 2002, Mr X was paid amounts after the sale of real property owned by a related company. In October 2002, a business associate of Mr X deposited amounts into the taxpayers' bank accounts. A further amount was credited to one of Mr X's foreign bank accounts in October 2006. The taxpayers testified that the amounts were loans, or transfers from other accounts which the Commissioner had already assessed. There was no evidence that there had been any repayments of the purported loan principals.
Issues decided by the tribunal
The Tribunal found that there was insufficient evidence to demonstrate that the amounts received during the 2003 income year were not assessable income of the taxpayers (paragraphs 53-5). The evidence established that the deposit in October 2006 originated in balances held in accounts earlier than the start of the 2007 income year, and, if income, was income of an earlier year (paragraphs 68-9). The taxpayers did not demonstrate that penalties for recklessness were excessive (paragraphs 65-6).
ATO view of Decision
The ATO accepts that the finding of the Tribunal in relation to the 2007 year was properly open to it on the evidence before it.
Administrative Treatment
Implications for ATO precedential documents (Public Rulings & Determinations etc)
None.
Implications for Law Administration Practice Statements
None.
Court citation:
[2012] AATA 917
(2012) 91 ATR 747
Legislative References:
Taxation Administration Act 1953
14ZZK
284-20 of Schedule 1
Case References:
FC of T v SNF (Australia) Pty Ltd
[2011] FCAFC 74
2011 ATC 20-265
(2011) 82 ATR 680
Davis v FC of T
(2000) 171 ALR 654
[2000] FCA 44
(2000) 44 ATR 140
2000 ATC 4201
FC of T v Dalco
(1990) 168 CLR 614
(1990) 20 ATR 1370
(1990) 90 ATC 4088
Galea v FC of T
90 ATC 5060
(1990) 21 ATR 1108
Gauci v FC of T
(1975) 135 CLR 81
(1975) 5 ATR 672
75 ATC 4257
George v FC of T
(1952) 86 CLR 183
[1952] HCA 21
Imperial Bottleshops Pty Ltd & Egerton v FC of T
91 ATC 4546
(1991) 22 ATR 148
McAndrew v FC of T
(1956) 98 CLR 263
[1956] HCA 62
Moreau v FC of T
(1926) 39 CLR 65
[1926] HCA 28
Pascoe v FC of T
(1956) 30 ALJR 402
Tisdall v Webber
[2011] FCAFC 76
(2011) 193 FCR 260
Trautwein v FC of T
(1936) 56 CLR 63
[1936] HCA 77
Vu v C of T
[2006] FCA 889
2006 ATC 4387
(2006) 63 ATR 341