The AAT has affirmed the Commissioner’s decision to assess husband and wife taxpayers on amounts deposited into their bank accounts in relation to the 2003 income year. It also affirmed the penalties imposed for recklessness and a 20% uplift for the relevant year.
The taxpayers were involved in the investment and subsequent sale of a large parcel of land. The taxpayers’ portion of the proceeds of the property sale was sent to a third party in the US. After the receipt of the money, the third party made deposits to the taxpayers’ Australian bank accounts in the relevant year. The taxpayers contended that the deposits were partly a loan from the third party and partly for a joint venture to purchase properties and therefore should not be assessed as income.
The AAT held the taxpayers’ had not discharged the burden of proof that the assessment by the Commissioner was excessive. It said the taxpayers did not provide any documentary evidence of a loan or joint venture. In relation to penalties, the AAT held that, based on the evidence, the taxpayers’ behaviour amounted to recklessness and that the penalties were not excessive. Further, it held that the taxpayers had not demonstrated any grounds for remission.
(AAT Case [2012] AATA 917, AAT, Ref Nos 2011/2206-09, O’Loughlin SM, 21 December 2012.)
[LTN 2, 4/1/13]