Re Harbutt and FCT – Rental income reassessed; no splitting of income between husband and wife when only the husband was on title [23]

The AAT has affirmed amended assessments issued to a taxpayer for the 2003 to 2005 income years to include 100% of the rental income and deductions in relation to a commercial property owned by the taxpayer. The taxpayer had lodged his income tax returns on the basis that the rental income derived in respect of…

Re Kelly’s Office Furniture Pty Ltd & Anor and FCT – Amounts included in taxable income of companies; deductions denied [22]

The AAT has affirmed income tax assessments issued to 2 company taxpayers for the 2003 and 2004 income years, increasing the taxable income of both companies. The shareholders of the companies are members of the same family. After a tax audit, the Commissioner issued income tax assessments increasing the taxable income of both companies. In…

Re Outbound Logistics Pty Ltd and FCT – Penalty for incorrectly claimed R&D expenditure reduced [20]

The AAT has set aside the Commissioner’s decision to impose a shortfall penalty of 50% for recklessness in relation to GST and income tax shortfalls arising from incorrectly claimed R&D expenditure and has substituted a penalty of 25% for failure to take reasonable care. The taxpayer had signed an agreement with a registered research agency…

Re LVR (WA) Pty Ltd & Anor and FCT – the case where the AAT previously copied the Commissioner’s submissions – new AAT member dismisses Commissioner’s subsequent application for the case to be dismissed [18]

The AAT has refused the Commissioner’s application to have assessment review applications by 2 taxpayer companies dismissed. The companies are LVR (WA) Pty Ltd and CZ Holdings Pty Ltd and they are involved in the purchase, subdivision and sale of residential lots. On 30 August 2007, the solicitor for both taxpayers filed with the Tribunal applications for…

Re Parrish and FCT – GST unpaid, taxable income understated and 75% penalties imposed for intentional disregard of the law [17]

The AAT has largely dismissed a taxpayer’s appeal finding that he had not reported and paid GST on taxable supplies, and had understated his taxable income in certain years, although it did find that some transactions should not form part of the taxpayer’s assessable income and GST liability. The taxpayer operated as a sole trader…

*DCT v Hua Wang Bank Berhad (No 4) – Summary judgment for GIC component maintained – subject to a stay [14]

Following a 2010 decision of the Federal Court, in DCT v Hua Wang Bank Berhad (No 2) [2010] FCA 1296, to grant summary judgment for some $39m against several companies, including penalties and GIC of over $2m, the taxpayers have been unsuccessful in their application to have the GIC component of the summary judgment dismissed.…

*FCT v Oswal – Commissioner obtains order for substituted service in respect of $186m debt [15]

The Federal Court has granted the Commissioner’s application for substituted service of a statement of claim on a taxpayer in relation to a tax liability of $186m for which the Commissioner had obtained judgment. The liability arose from an audit of the taxpayer and her husband and the taxpayer’s ammonia plant business that the taxpayer…

*FCT v Regent Pacific Group Limited & Ors – Freezing order granted over $12.7m capital gain made by foreign company and substituted service ordered [16]

The Federal Court has granted the Commissioner’s application for freezing orders against a taxpayer-company registered in the Cayman Islands that made a capital gain of over $12.7m from the sale of shares it held in a company engaged in mining operations in Western Australia. At the same time, the Court granted the Commissioner’s application for…