A taxpayer, both the trustee and a beneficiary of a family trust that operated independent supermarkets has been unsuccessful in discharging the onus of proof that amended assessments issued by the Commissioner for the 1993 to 2003 income years were excessive. The assessments were issued on the basis that the taxpayer was engaged in alleged evasion. The issues for consideration included whether: there was understated income (eg net profit from the supermarket business); deductions were correctly disallowed (eg superannuation contributions); the taxpayer failed to lodge certain returns; and the taxpayer was liable to administrative penalties of 75%.
The AAT found that the taxpayer had not discharged the relevant onus in respect of any of the matters. Among other things, it found that the objective evidence did not permit a finding that it had not understated its income (which it said included contradictory, vague and implausible documentary and oral evidence).
The AAT also found that the Commissioner was correct in disallowing superannuation deductions as they were not all made on behalf of employees.
It also found that there was no objective evidence of the lodgment of returns, which the taxpayer claimed had been lodged.
Finally, the AAT confirmed that the taxpayer was liable for penalties at 75% because it found there was an intentional disregard of the tax laws, and that there was no sound reason why the penalty tax should be remitted.
(AAT Case [2012] AATA 178, AAT, Ref Nos 2007/5059-5063, 2007/5340-5344, 2010/3486, Fice SM, 23 March 2012.)
[LTN 58, 26/3]